Boise Cascade Company ("Boise Cascade," the "Company," "we," or
"our") (NYSE: BCC) today reported net income of $103.2 million, or
$2.61 per share, on sales of $1.6 billion for the third quarter
ended September 30, 2020, compared with net income of $27.2
million, or $0.69 per share, on sales of $1.3 billion for the third
quarter ended September 30, 2019. Third quarter 2020 results
include a $10.5 million after-tax loss on extinguishment of debt,
or $0.27 per share, as the Company refinanced its senior notes at a
lower interest rate with an extended maturity. Third quarter 2019
results include $1.0 million of after-tax losses, or $0.03 per
share, from a non-cash pension settlement charge.
"Extraordinary market conditions, along with great execution by
both of our businesses, helped us deliver outstanding results in
the third quarter. Financial results aside, I am proud that
associates across our organization continue to effectively adapt to
challenges brought about by the pandemic without losing focus on
our core value of safety. It has also been inspiring to witness our
teams in Louisiana and Oregon caring for each other and their
communities in response to the gulf coast hurricanes and the
catastrophic fires in the Pacific Northwest," commented Nate
Jorgensen, CEO. "We look to the future with optimism, as our
balance sheet provides us the flexibility to pursue organic and
acquisition growth opportunities in support of our customers and
suppliers. Together with our Board of Directors, we took action to
return a portion of our higher than targeted cash balance to our
shareholders through our recently announced supplemental
dividend."
Third Quarter 2020 Highlights
3Q 2020
3Q 2019
% change
(in thousands, except per-share
data and
percentages)
Consolidated Results
Sales
$
1,589,313
$
1,269,524
25
%
Net income
103,192
27,171
280
%
Net income per common share - diluted
2.61
0.69
278
%
Adjusted EBITDA 1
178,564
64,054
179
%
Segment Results
Wood Products sales
$
363,674
$
325,102
12
%
Wood Products income
66,035
15,597
323
%
Wood Products EBITDA 1
79,973
30,849
159
%
Building Materials Distribution sales
1,437,683
1,145,621
25
%
Building Materials Distribution income
107,901
38,665
179
%
Building Materials Distribution EBITDA
1
113,587
43,943
158
%
1
For reconciliations of non-GAAP measures,
see summary notes at the end of this press release.
In response to rapidly evolving market conditions and economic
uncertainties surrounding the impact of COVID-19, and various
restrictions that limited residential construction activity, our
Wood Products segment and many other producers in our industry
reduced production levels early in the second quarter. In addition,
many companies involved in the manufacture and distribution of
building materials dramatically reduced inventory levels in late
first quarter and early second quarter in response to falling
commodity wood products prices and future demand uncertainty. As
restrictions were loosened or rescinded, construction activity
resumed mid-second quarter and continued at a robust pace through
the third quarter. Across commodity product lines, product demand
in the third quarter exceeded supply, and producers struggled to
restore capacity because of COVID-19 related disruptions and
natural disasters, causing significant increases in commodity
products prices. Our BMD warehouse sales were strong throughout the
third quarter as our retail lumberyard customers are relying on our
broad base of inventory and high service levels to minimize their
working capital investment given COVID-19 related uncertainties and
historically high commodity product prices. In addition, we have
had strong demand from our home center customers in response to
elevated repair and remodel and "do-it-yourself" activity as people
are spending more time at home during the pandemic.
In the third quarter 2020, total U.S. housing starts increased
11% compared to the same period last year. Single-family housing
starts, the primary driver of our sales volumes, also increased
17%. On a year-to-date basis through September 2020, total and
single-family housing starts increased 5% and 6%, respectively,
compared with the same period in 2019.
Wood Products
Wood Products' sales, including sales to Building Materials
Distribution (BMD), increased $38.6 million, or 12%, to $363.7
million for the three months ended September 30, 2020, from $325.1
million for the three months ended September 30, 2019. The increase
in sales was driven primarily by higher plywood prices and higher
sales volumes for I-joists. Demand for plywood in third quarter
2020 far outpaced industry production levels, driving the sharp
increase in pricing. These increases were offset partially by lower
sales volumes for plywood and LVL, as well as decreased net sales
prices for LVL and I-joists (collectively referred to as EWP).
Wood Products' segment income increased $50.4 million to $66.0
million for the three months ended September 30, 2020, from $15.6
million for the three months ended September 30, 2019. The increase
in segment income was due primarily to higher plywood sales prices,
offset partially by higher wood fiber costs, as well as lower net
sales prices of EWP. In addition, selling and distribution expenses
and general and administrative expenses increased $2.0 million and
$1.7 million, respectively.
Comparative average net selling prices and sales volume changes
for EWP and plywood are as follows:
3Q 2020 vs. 3Q 2019
3Q 2020 vs. 2Q 2020
Average Net Selling Prices
LVL
(2)%
(1)%
I-joists
(2)%
(2)%
Plywood
69%
49%
Sales Volumes
LVL
(2)%
19%
I-joists
5%
27%
Plywood
(8)%
1%
Building Materials Distribution
BMD's sales increased $292.1 million, or 25%, to $1,437.7
million for the three months ended September 30, 2020, from
$1,145.6 million for the three months ended September 30, 2019.
Compared with the same quarter in the prior year, the overall
increase in sales was driven by sales price increases of 25%, with
relatively flat sales volumes. By product line, commodity sales
increased 54%, general line product sales increased 6%, and sales
of EWP (substantially all of which is sourced through our Wood
Products segment) increased 6%.
BMD segment income increased $69.2 million to $107.9 million for
the three months ended September 30, 2020, from $38.7 million in
the comparative prior year quarter. The increase in segment income
was driven by a gross margin increase of $86.7 million, resulting
primarily from improved gross margins on commodity products
compared with third quarter 2019. The margin improvement was offset
partially by increased selling and distribution expenses and
general and administrative expenses of $14.3 million and $2.5
million, respectively.
Unallocated Corporate Costs
Unallocated corporate expenses increased $6.0 million to $15.4
million from $9.4 million for the three months ended September 30,
2020, compared with the same period in the prior year. The increase
was due primarily to higher incentive compensation and business
interruption losses. As part of our self-insured risk retention
program, corporate absorbed approximately $3.2 million of estimated
business interruption losses at Wood Products facilities in third
quarter 2020. The losses resulted from downtime at our Louisiana
manufacturing facilities due to Hurricane Laura and from a
fire-related production disruption at our Chester, South Carolina,
plywood plant.
Balance Sheet and Liquidity
Boise Cascade ended third quarter 2020 with $503.9 million of
cash and cash equivalents and $345.4 million of undrawn committed
bank line availability, for total available liquidity of $849.3
million. The Company had $443.6 million of outstanding debt at
September 30, 2020.
On July 27, 2020, we issued $400 million of 4.875% senior notes
due July 1, 2030 (2030 Notes). With proceeds from the 2030 Notes
issuance, we retired $350 million of 5.625% senior notes due 2024
(2024 Notes) and paid-off our American AgCredit term loan of $45.0
million. In connection with these transactions, we recognized a
pre-tax loss on extinguishment of debt of $14.0 million during
third quarter 2020.
In response to the uncertainty of the impacts of COVID-19, we
reduced our planned capital spending for 2020 from our previously
expected range of $85-to-$95 million to $60-to-$75 million. We
expect our capital spending, excluding acquisitions, to be
approximately $80-to-$90 million in 2021.
We have announced our intention to terminate our qualified
defined benefit pension plan (Pension Plan). We expect to fully
eliminate the liabilities of our Pension Plan in fourth quarter
2020, upon which we will record the related non-cash accounting
adjustments as required by the application of pension settlement
accounting rules. We do not expect any further cash contributions
to terminate the Pension Plan. For additional information on the
termination of our Pension Plan, see our Form 10-Q for the
quarterly period ended September 30, 2020, filed with the
Securities and Exchange Commission.
Dividends
On September 28, 2020, our board of directors declared a
supplemental dividend of $1.60 per share on our common stock,
payable on November 2, 2020, to stockholders of record on October
15, 2020. At September 30, 2020, we accrued $62.7 million in
"Dividends payable" on our Consolidated Balance Sheets,
representing our supplemental dividend declaration. On October 29,
2020, our board of directors declared a quarterly dividend of $0.10
per share on our common stock, payable on December 15, 2020, to
stockholders of record on December 1, 2020.
Future dividend declarations, including amount per share, record
date and payment date, will be made at the discretion of our board
of directors and will depend upon, among other things, legal
capital requirements and surplus, our future operations and
earnings, general financial condition, contractual restrictions,
and other factors that our board of directors may deem
relevant.
Outlook
As we begin the fourth quarter, Wood Products continues to make
efforts to restore production rates to pre-COVID-19 levels in
response to strong end-product demand, particularly for our EWP.
However, we continue to experience periodic short-term disruptions
at many locations due to COVID-19. In addition, we expect activity
levels across our distribution network to continue to vary widely
as COVID-19 impacts geographies across the U.S. to differing
degrees, and federal, state, or local restrictions are implemented
or rescinded. To date, we have not experienced significant supply
chain disruptions that would limit our ability to meet customer
delivery commitments or source the necessary raw materials and
finished goods needed by our operations. We continue to conduct
business with modifications to mill and distribution center
housekeeping and cleanliness protocols, employee travel, employee
work locations, and virtualization or cancellation of certain sales
and marketing events, among other modifications. In addition, we
continue to actively monitor evolving developments and may take
actions that alter our business operations as may be required by
federal, state, or local authorities, or that we determine are in
the best interests of our employees, customers, suppliers,
communities, and stockholders.
While there continues to be a heightened level of economic
uncertainty given the pandemic, low mortgage rates, continuation of
work-from-home practices by many in the economy, and demographics
in the U.S. have created a favorable demand environment for new
residential construction, which we expect to continue into next
year. Furthermore, with homeowners spending more time at home,
repair and remodel spending may continue to strengthen as
homeowners invest in existing homes. As of October 2020, the Blue
Chip Economic Indicators consensus forecast for 2020 and 2021
single- and multi-family housing starts in the U.S. were 1.32
million and 1.38 million units, respectively, compared with actual
housing starts of 1.29 million in 2019, as reported by the U.S.
Census Bureau. Although we believe that current U.S. demographics
support a higher level of housing starts, and many national home
builders are reporting strong near-term backlogs, the impacts of
COVID-19 on residential construction are uncertain. A
re-acceleration of COVID-19 cases could prompt state or local
officials to reinstitute restrictions that could limit or constrain
building activity. In addition, the economic consequences of
COVID-19 may adversely affect the pace of household formation rates
and residential repair-and-remodeling activity due to high
unemployment rates, lower wages, reduced consumer confidence,
prospective home buyers' lack of ability to view homes in person,
homebuyers' access to and cost of financing, and housing
affordability, as well as other factors.
Strong demand when coupled with capacity constraints in third
quarter 2020 created supply/demand imbalances in the marketplace
and historically high pricing levels for commodity lumber and panel
products. However, October 2020 composite lumber and panel prices
have declined by approximately 35% and 10% from the peaks reached
in September 2020 and are at risk for further price erosion that
will be dependent on the impact of COVID-19 on residential
construction, capacity restoration and industry operating rates,
net import and export activity, transportation constraints or
disruptions, inventory levels in various distribution channels, and
seasonal demand patterns. As a wholesale distributor of a broad mix
of commodity products and a manufacturer of certain commodity
products, we have sales and profitability exposure to declines in
commodity product prices. As previously announced, we will also
continue to evaluate plywood market conditions, log supply
availability, operating costs, environmental permits, and other
factors influencing our Elgin plywood operations as we approach
2021.
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 to discuss
third quarter earnings on Monday, November 2, 2020, at 11 a.m.
Eastern.
To participate in the conference call, dial 844-795-4410 and use
participant passcode 2863868 (international callers should dial
661-378-9637). To join the webcast, go to the Investor Relations
section at www.bc.com and select the Event Calendar link.
A replay of the conference call will be available from Monday,
November 2, 2020, at 2 p.m. Eastern through Monday, November 9,
2020, at 2 p.m. Eastern. Replay numbers are 855-859-2056 for U.S.
callers and 404-537-3406 for international callers with a passcode
of 2863868. The archived webcast will be available in the Investor
Relations section of Boise Cascade's website.
Use of Non-GAAP Financial Measures
We refer to the terms EBITDA and Adjusted EBITDA in this
earnings release and the accompanying Quarterly Statistical
Information 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 (loss) 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.
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 (loss), income (loss) 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 (loss) 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 Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Statements preceded or followed by, or that otherwise
include, the words "believes," "expects," "anticipates," "intends,"
"project," "estimates," "plans," "forecast," "is likely to," and
similar expressions or future or conditional verbs such as "will,"
"may," "would," "should," and "could" are generally forward-looking
in nature and not historical facts. Such statements are based upon
the current beliefs and expectations of our management and are
subject to significant risks and uncertainties. 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, changes in the competitive position
of our products, commodity input costs, the effect of general
economic conditions, the effect of COVID-19, 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.
Boise Cascade Company
Consolidated Statements of
Operations
(in thousands, except per-share
data)
Three Months Ended
Nine Months Ended
September 30
June 30,
2020
September 30
2020
2019
2020
2019
Sales
$
1,589,313
$
1,269,524
$
1,242,760
$
4,002,607
$
3,541,691
Costs and expenses
Materials, labor, and other operating
expenses (excluding depreciation)
1,261,697
1,078,924
1,048,902
3,302,869
3,026,401
Depreciation and amortization
20,029
20,969
19,899
75,260
59,640
Selling and distribution expenses
122,884
106,567
103,566
325,913
292,459
General and administrative expenses
26,060
18,603
18,755
60,899
52,064
Loss on curtailment of facility
—
—
38
1,707
—
Other (income) expense, net
71
(437
)
(170
)
70
(557
)
1,430,741
1,224,626
1,190,990
3,766,718
3,430,007
Income from operations
158,572
44,898
51,770
235,889
111,684
Foreign currency exchange gain (loss)
265
(200
)
409
(199
)
210
Pension expense (excluding service
costs)
(302
)
(1,613
)
(302
)
(991
)
(2,202
)
Interest expense
(7,002
)
(6,532
)
(6,633
)
(20,056
)
(19,455
)
Interest income
113
837
190
958
1,745
Change in fair value of interest rate
swaps
147
(569
)
(514
)
(2,681
)
(3,103
)
Loss on extinguishment of debt
(13,968
)
—
—
(13,968
)
—
(20,747
)
(8,077
)
(6,850
)
(36,937
)
(22,805
)
Income before income taxes
137,825
36,821
44,920
198,952
88,879
Income tax provision
(34,633
)
(9,650
)
(11,334
)
(49,974
)
(22,601
)
Net income
$
103,192
$
27,171
$
33,586
$
148,978
$
66,278
Weighted average common shares
outstanding:
Basic
39,315
39,087
39,312
39,264
39,020
Diluted
39,526
39,292
39,387
39,396
39,202
Net income per common share:
Basic
$
2.62
$
0.70
$
0.85
$
3.79
$
1.70
Diluted
$
2.61
$
0.69
$
0.85
$
3.78
$
1.69
Dividends declared per common share
$
1.70
$
0.09
$
0.10
$
1.90
$
0.27
See accompanying summary notes to consolidated financial
statements and segment information.
Wood Products Segment
Statements of
Operations
(in thousands, except
percentages)
Three Months Ended
Nine Months Ended
September 30
June 30,
2020
September 30
2020
2019
2020
2019
Segment sales
$
363,674
$
325,102
$
281,505
$
965,240
$
978,881
Costs and expenses
Materials, labor, and other operating
expenses (excluding depreciation)
268,930
283,354
239,626
782,590
855,929
Depreciation and amortization
13,938
15,252
13,931
57,472
43,082
Selling and distribution expenses
9,684
7,718
7,552
25,220
23,284
General and administrative expenses
5,084
3,379
3,451
11,547
10,480
Loss on curtailment of facility
—
—
38
1,707
—
Other (income) expense, net
3
(198
)
(167
)
(168
)
(29
)
297,639
309,505
264,431
878,368
932,746
Segment income
$
66,035
$
15,597
$
17,074
$
86,872
$
46,135
(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)
73.9
%
87.2
%
85.1
%
81.1
%
87.4
%
Depreciation and amortization
3.8
%
4.7
%
4.9
%
6.0
%
4.4
%
Selling and distribution expenses
2.7
%
2.4
%
2.7
%
2.6
%
2.4
%
General and administrative expenses
1.4
%
1.0
%
1.2
%
1.2
%
1.1
%
Loss on curtailment of facility
—
%
—
%
—
%
0.2
%
—
%
Other (income) expense, net
—
%
(0.1
)
%
(0.1
)
%
—
%
—
%
81.8
%
95.2
%
93.9
%
91.0
%
95.3
%
Segment income
18.2
%
4.8
%
6.1
%
9.0
%
4.7
%
Building Materials
Distribution Segment
Statements of
Operations
(in thousands, except
percentages)
Three Months Ended
Nine Months Ended
September 30
June 30,
2020
September 30
2020
2019
2020
2019
Segment sales
$
1,437,683
$
1,145,621
$
1,134,260
$
3,621,940
$
3,150,750
Costs and expenses
Materials, labor, and other operating
expenses (excluding depreciation)
1,201,722
996,313
982,385
3,101,948
2,758,375
Depreciation and amortization
5,686
5,278
5,584
16,614
15,438
Selling and distribution expenses
113,146
98,797
95,958
300,527
269,012
General and administrative expenses
9,282
6,759
7,206
22,623
18,420
Other (income) expense, net
(54
)
(191
)
(83
)
(185
)
(477
)
1,329,782
1,106,956
1,091,050
3,441,527
3,060,768
Segment income
$
107,901
$
38,665
$
43,210
$
180,413
$
89,982
(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)
83.6
%
87.0
%
86.6
%
85.6
%
87.5
%
Depreciation and amortization
0.4
%
0.5
%
0.5
%
0.5
%
0.5
%
Selling and distribution expenses
7.9
%
8.6
%
8.5
%
8.3
%
8.5
%
General and administrative expenses
0.6
%
0.6
%
0.6
%
0.6
%
0.6
%
Other (income) expense, net
—
%
—
%
—
%
—
%
—
%
92.5
%
96.6
%
96.2
%
95.0
%
97.1
%
Segment income
7.5
%
3.4
%
3.8
%
5.0
%
2.9
%
Segment Information
(in thousands)
Three Months Ended
Nine Months Ended
September 30
June 30,
2020
September 30
2020
2019
2020
2019
Segment sales
Wood Products
$
363,674
$
325,102
$
281,505
$
965,240
$
978,881
Building Materials Distribution
1,437,683
1,145,621
1,134,260
3,621,940
3,150,750
Intersegment eliminations
(212,044
)
(201,199
)
(173,005
)
(584,573
)
(587,940
)
Total net sales
$
1,589,313
$
1,269,524
$
1,242,760
$
4,002,607
$
3,541,691
Segment income
Wood Products
$
66,035
$
15,597
$
17,074
$
86,872
$
46,135
Building Materials Distribution
107,901
38,665
43,210
180,413
89,982
Total segment income
173,936
54,262
60,284
267,285
136,117
Unallocated corporate costs
(15,364
)
(9,364
)
(8,514
)
(31,396
)
(24,433
)
Income from operations
$
158,572
$
44,898
$
51,770
$
235,889
$
111,684
Segment EBITDA (a)
Wood Products
$
79,973
$
30,849
$
31,005
$
144,344
$
89,217
Building Materials Distribution
113,587
43,943
48,794
197,027
105,420
See accompanying summary notes to consolidated financial
statements and segment information.
Boise Cascade Company
Consolidated Balance
Sheets
(in thousands)
September 30, 2020
December 31, 2019
ASSETS
Current
Cash and cash equivalents
$
503,935
$
285,237
Receivables
Trade, less allowances of $1,629 and
$591
425,585
215,894
Related parties
375
568
Other
11,929
15,184
Inventories
454,327
497,596
Prepaid expenses and other
17,368
8,285
Total current assets
1,413,519
1,022,764
Property and equipment, net
447,330
476,949
Operating lease right-of-use assets
63,231
64,228
Finance lease right-of-use assets
30,033
21,798
Timber deposits
13,945
12,287
Goodwill
60,382
60,382
Intangible assets, net
16,880
17,797
Deferred income taxes
7,619
7,952
Other assets
6,897
9,194
Total assets
$
2,059,836
$
1,693,351
Boise Cascade Company
Consolidated Balance Sheets
(continued)
(in thousands, except per-share
data)
September 30, 2020
December 31, 2019
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current
Accounts payable
Trade
$
381,038
$
222,930
Related parties
1,654
1,624
Accrued liabilities
Compensation and benefits
118,437
83,943
Income taxes payable
16,606
—
Interest payable
3,596
6,723
Dividends payable
62,722
—
Other
92,335
69,772
Total current liabilities
676,388
384,992
Debt
Long-term debt
443,583
440,544
Other
Compensation and benefits
32,005
45,586
Operating lease liabilities, net of
current portion
57,494
58,029
Finance lease liabilities, net of current
portion
31,923
23,419
Deferred income taxes
24,275
26,694
Other long-term liabilities
16,032
12,757
161,729
166,485
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, 44,568 and 44,353 shares issued,
respectively
446
444
Treasury stock, 5,367 shares at cost
(138,909
)
(138,909
)
Additional paid-in capital
536,025
533,345
Accumulated other comprehensive loss
(49,732
)
(50,248
)
Retained earnings
430,306
356,698
Total stockholders' equity
778,136
701,330
Total liabilities and stockholders'
equity
$
2,059,836
$
1,693,351
Boise Cascade Company
Consolidated Statements of
Cash Flows
(in thousands)
Nine Months Ended September
30
2020
2019
Cash provided by (used for)
operations
Net income
$
148,978
$
66,278
Items in net income not using (providing)
cash
Depreciation and amortization, including
deferred financing costs and other
76,784
61,340
Stock-based compensation
5,839
6,016
Pension expense
1,492
2,687
Deferred income taxes
(2,460
)
10,008
Change in fair value of interest rate
swaps
2,681
3,103
Loss on curtailment of facility (excluding
severance)
1,476
—
Other
205
(235
)
Loss on extinguishment of debt
13,968
—
Decrease (increase) in working capital,
net of acquisitions
Receivables
(205,995
)
(77,811
)
Inventories
42,904
45,184
Prepaid expenses and other
(9,641
)
(3,516
)
Accounts payable and accrued
liabilities
213,935
66,130
Pension contributions
(12,659
)
(1,324
)
Income taxes payable
17,121
19,109
Other
(857
)
(2,219
)
Net cash provided by operations
293,771
194,750
Cash provided by (used for)
investment
Expenditures for property and
equipment
(46,994
)
(53,249
)
Acquisitions of businesses and
facilities
—
(15,676
)
Proceeds from sales of facilities
—
2,493
Proceeds from sales of assets and
other
563
1,644
Net cash used for investment
(46,431
)
(64,788
)
Cash provided by (used for)
financing
Borrowings of long-term debt, including
revolving credit facility
400,000
5,500
Payments of long-term debt, including
revolving credit facility
(405,774
)
(5,500
)
Payments of deferring financing costs
(6,222
)
—
Dividends paid on common stock
(12,553
)
(11,070
)
Tax withholding payments on stock-based
awards
(3,309
)
(3,575
)
Other
(784
)
(545
)
Net cash used for financing
(28,642
)
(15,190
)
Net increase in cash and cash
equivalents
218,698
114,772
Balance at beginning of the
period
285,237
191,671
Balance at end of the period
$
503,935
$
306,443
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
2019 Form 10-K and 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 September 30, 2020 and 2019, and
June 30, 2020, and the nine months ended September 30, 2020 and
2019:
Three Months Ended
Nine Months Ended
September 30
June 30,
2020
September 30
2020
2019
2020
2019
(in thousands)
Net income
$
103,192
$
27,171
$
33,586
$
148,978
$
66,278
Interest expense
7,002
6,532
6,633
20,056
19,455
Interest income
(113
)
(837
)
(190
)
(958
)
(1,745
)
Income tax provision
34,633
9,650
11,334
49,974
22,601
Depreciation and amortization
20,029
20,969
19,899
75,260
59,640
EBITDA
164,743
63,485
71,262
293,310
166,229
Change in fair value of interest rate
swaps
(147
)
569
514
2,681
3,103
Loss on extinguishment of debt
13,968
—
—
13,968
—
Adjusted EBITDA
$
178,564
$
64,054
$
71,776
$
309,959
$
169,332
The following table reconciles segment income and unallocated
corporate costs to EBITDA and adjusted EBITDA for the three months
ended September 30, 2020 and 2019, and June 30, 2020, and the nine
months ended September 30, 2020 and 2019:
Three Months Ended
Nine Months Ended
September 30
June 30,
2020
September 30
2020
2019
2020
2019
(in thousands)
Wood Products
Segment income
$
66,035
$
15,597
$
17,074
$
86,872
$
46,135
Depreciation and amortization
13,938
15,252
13,931
57,472
43,082
EBITDA
$
79,973
$
30,849
$
31,005
$
144,344
$
89,217
Building Materials Distribution
Segment income
$
107,901
$
38,665
$
43,210
$
180,413
$
89,982
Depreciation and amortization
5,686
5,278
5,584
16,614
15,438
EBITDA
$
113,587
$
43,943
$
48,794
$
197,027
$
105,420
Corporate
Unallocated corporate costs
$
(15,364
)
$
(9,364
)
$
(8,514
)
$
(31,396
)
$
(24,433
)
Foreign currency exchange gain (loss)
265
(200
)
409
(199
)
210
Pension expense (excluding service
costs)
(302
)
(1,613
)
(302
)
(991
)
(2,202
)
Change in fair value of interest rate
swaps
147
(569
)
(514
)
(2,681
)
(3,103
)
Loss on extinguishment of debt
(13,968
)
—
—
(13,968
)
—
Depreciation and amortization
405
439
384
1,174
1,120
EBITDA
(28,817
)
(11,307
)
(8,537
)
(48,061
)
(28,408
)
Change in fair value of interest rate
swaps
(147
)
569
514
2,681
3,103
Loss on extinguishment of debt
13,968
—
—
13,968
—
Corporate adjusted EBITDA
$
(14,996
)
$
(10,738
)
$
(8,023
)
$
(31,412
)
$
(25,305
)
Total company adjusted EBITDA
$
178,564
$
64,054
$
71,776
$
309,959
$
169,332
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201030005681/en/
Investor Relations Contact - Wayne Rancourt 208 384
6073
Media Contact - Lisa Tschampl 208 384 6552
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