Stock Quote

Boise Cascade Company Reports Fourth Quarter and Full Year 2020 Results

Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported fourth quarter net income of $26.0 million, or $0.66 per share, on sales of $1.5 billion. For the full year 2020, Boise Cascade reported net income of $175.0 million, or $4.44 per share, on sales of $5.5 billion. Fourth quarter and full year earnings per share were negatively impacted by $1.10 per share and $1.69 per share, respectively, related to the events further described below.

Fourth quarter 2020 results included the following non-cash items that negatively effected reported earnings (after-tax amounts assume a 25% tax rate):

  • $6.2 million of pre-tax pension settlement charges, or $0.12 per share after-tax, related to the elimination of our qualified defined benefit pension plan (Plan Termination).
  • $38.8 million of income tax expense, or $0.98 per share, related to the release of stranded tax effects upon Plan Termination.

Full year 2020 results include the above items, as well as the following:

  • $15.0 million and $1.7 million, respectively, of pre-tax accelerated depreciation and other curtailment related costs, or $0.32 per share after-tax, due to the permanent curtailment of I-joist production at our Roxboro, North Carolina, facility.
  • $14.0 million pre-tax loss on extinguishment of debt, or $0.27 per share after-tax, as the Company refinanced its senior notes at a lower interest rate with an extended maturity.

For further information, see "Balance Sheet and Liquidity" and "Wood Products" below.

“In the face of many challenges presented by extraordinary market conditions and the pandemic, I am proud that we delivered the best safety performance in our Company’s history in 2020. Our associates showed great resilience, and we fully leveraged our proven values to provide direction and clarity to our team during these unprecedented times,” commented Nate Jorgensen, CEO. “We reinvested in our businesses through door shop expansions in Texas, facility expansions in a few key distribution markets, and the log utilization center project at our Florien mill. We also provided dividends to our shareholders and supported our team and communities in response to natural disasters in Louisiana and Oregon. I am optimistic and confident about 2021 and the future of Boise Cascade.”

Fourth Quarter and Year End 2020 Highlights

4Q 2020

4Q 2019

% change

2020

2019

% change

(in thousands, except per-share data and percentages)

Consolidated Results

Sales

$

1,472,231

$

1,101,713

34

%

$

5,474,838

$

4,643,404

18

%

Net income

26,001

14,647

78

%

174,979

80,925

116

%

Net income per common share - diluted

0.66

0.37

78

%

4.44

2.06

116

%

Adjusted EBITDA 1

113,139

45,243

150

%

423,098

214,575

97

%

Segment Results

Wood Products sales

$

358,661

$

296,286

21

%

$

1,323,901

$

1,275,167

4

%

Wood Products income

40,848

8,062

407

%

127,720

54,197

136

%

Wood Products EBITDA 1

54,517

22,651

141

%

198,861

111,868

78

%

Building Materials Distribution sales

1,330,078

986,969

35

%

4,952,018

4,137,719

20

%

Building Materials Distribution income

67,081

26,254

156

%

247,494

116,236

113

%

Building Materials Distribution EBITDA 1

72,927

31,585

131

%

269,954

137,005

97

%

1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.

As both a manufacturer and a distributor, our 2020 financial results were favorably impacted by higher commodity wood products pricing compared to pricing in 2019. During 2020, our business experienced rapidly evolving market conditions and economic uncertainties surrounding the impact of COVID-19, and various restrictions that limited residential construction activity. In response to COVID-19 uncertainties, early in the second quarter, our Wood Products segment and many other producers in our industry reduced production levels. 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 throughout the remainder of 2020. 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. In the fourth quarter, composite lumber and panel prices fell sharply during October and November 2020 before a strong pricing rebound in December 2020. Our BMD warehouse sales were strong throughout the third and fourth quarters as our retail lumberyard customers relied 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 fourth quarter 2020, total U.S. housing starts increased 12% compared to the same period in 2019. Single-family housing starts, the primary driver of our sales volumes, also increased 30%. For the full year 2020, total and single-family housing starts increased 7% and 12%, respectively, compared with the same period in 2019.

Wood Products

Wood Products' sales, including sales to Building Materials Distribution (BMD), increased $62.4 million, or 21%, to $358.7 million for the three months ended December 31, 2020, from $296.3 million for the three months ended December 31, 2019. The increase in sales was driven primarily by higher plywood and lumber prices, as well as higher sales volumes for I-joists. Demand for plywood in fourth quarter 2020 far outpaced industry production levels, driving the continued favorable pricing. These increases were offset partially by decreased net sales prices for LVL and I-joists (collectively referred to as EWP), as well as lower sales volumes for plywood and LVL. Wood Products' segment income increased $32.8 million to $40.8 million for the three months ended December 31, 2020, from $8.1 million for the three months ended December 31, 2019. The increase in segment income was due primarily to higher plywood and lumber sales prices, as well as higher I-joists sales volumes. These improvements were offset partially by higher wood fiber costs, as well as lower net sales prices of EWP.

For the year ended December 31, 2020, sales, including sales to BMD, increased $48.7 million, or 4%, to $1,323.9 million from $1,275.2 million in 2019. The increase in sales was driven primarily by higher plywood prices, as well as higher sales volumes for I-joists. These increases were offset partially by lower sales volumes of plywood and LVL, and lower net sales prices for EWP. The lower volume for plywood sales reflects our continued work to optimize veneer into EWP production, as well as periodic short-term disruptions related to COVID-19. Wood Products' segment income increased $73.5 million to $127.7 million for the year ended December 31, 2020, from $54.2 million for the year ended December 31, 2019. The increase in segment income was due primarily to higher plywood sales prices, as well as higher I-joist sales volumes and lower manufacturing costs. These improvements were offset partially by accelerated depreciation of $15.0 million and other closure-related costs of $1.7 million at our Roxboro, North Carolina facility, as well as lower EWP prices and higher wood fiber costs. In addition, selling and distribution expenses increased $1.9 million.

Comparative average net selling prices and sales volume changes for EWP and plywood are as follows:

4Q 2020 vs. 4Q 2019

2020 vs. 2019

Average Net Selling Prices

LVL

(3)%

(2)%

I-joists

(4)%

(2)%

Plywood

62%

30%

Sales Volumes

LVL

(2)%

(3)%

I-joists

27%

6%

Plywood

(3)%

(6)%

Building Materials Distribution

BMD's sales increased $343.1 million, or 35%, to $1,330.1 million for the three months ended December 31, 2020, from $987.0 million for the three months ended December 31, 2019. Compared with the same quarter in the prior year, the overall increase in sales was driven by sales price and sales volume increases of 26% and 9%, respectively. By product line, commodity sales increased 62%, general line product sales increased 16%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 15%. BMD segment income increased $40.8 million to $67.1 million for the three months ended December 31, 2020, from $26.3 million in the comparative prior year quarter. The improvement in segment income was driven by a gross margin increase of $45.4 million, resulting primarily from improved gross margins on commodity products, as well as higher sales of general line products and EWP compared with fourth quarter 2019. The increase in gross margin during fourth quarter 2020 was offset partially by increased selling and distribution expenses of $4.1 million.

For the year ended December 31, 2020, sales increased $814.3 million, or 20%, to $4,952.0 million from $4,137.7 million in 2019. The increase in sales was driven by a sales price and sales volume increases of 13% and 7%, respectively. By product line, commodity sales increased 34%, general line product sales increased 11%, and sales of EWP increased 6%. BMD segment income increased $131.3 million to $247.5 million for the year ended December 31, 2020, from $116.2 million for the year ended December 31, 2019. The increase in segment income was driven by a gross margin increase of $173.0 million, resulting primarily from improved gross margins on commodity products, as well as higher sales of general line products compared with 2019. The margin improvement was offset partially by increased selling and distribution expenses and general and administrative expenses of $35.7 million and $4.2 million, respectively.

Unallocated Corporate Costs

Unallocated corporate expenses increased $6.2 million to $40.2 million for the year ended December 31, 2020, from $34.0 million for the year ended December 31, 2019. 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 $3.5 million of estimated business interruption losses at Wood Products facilities in 2020. The losses resulted from downtime at our Louisiana manufacturing facilities due to hurricanes and from a fire-related production disruption at our Chester, South Carolina, plywood plant.

Balance Sheet and Liquidity

Boise Cascade ended fourth quarter 2020 with $405.4 million of cash and cash equivalents and $345.2 million of undrawn committed bank line availability, for total available liquidity of $750.6 million. The Company had $443.8 million of outstanding debt at December 31, 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 2020.

In December 2020, we eliminated our qualified defined benefit pension plan (Pension Plan). The process of eliminating the Pension Plan included lump-sum payments made to eligible plan participants at their election and the purchase of a buy-out group annuity contract (Buy-Out) from The Prudential Insurance Company of America (Prudential), which was funded with plan assets. When the Buy-Out became effective on December 31, 2020, we irrevocably transferred to Prudential the future benefit obligations and annuity administration for all remaining plan participants (or their beneficiaries) in the Pension Plan. These transactions fully eliminated the liabilities of our Pension Plan, resulting in a non-cash settlement charge of $6.2 million in fourth quarter 2020.

Prior to the Plan Termination, "Accumulated other comprehensive loss" on our Consolidated Balance Sheet included the stranded tax effects of our conversion from a limited liability company to a corporation in 2013 and the adoption of the Tax Cuts and Jobs Act (the "Tax Act") in 2017. Upon Plan Termination, these stranded tax effects of $38.8 million were required to be released into income tax expense under GAAP. For additional information on the Plan Termination, see our Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

We expect capital expenditures in 2021 to total approximately $80 million to $90 million. This level of capital expenditures could increase or decrease as a result of a number of factors, including acquisitions, efforts to accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, and timing of equipment purchases.

Dividends

On February 5, 2021, our board of directors declared a dividend of $0.10 per share of our common stock, payable on March 15, 2021, to stockholders of record on February 22, 2021.

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 2021, Wood Products continues to experience periodic short-term disruptions at many locations due to COVID-19 as we continue to make efforts to restore production rates to pre-COVID-19 levels in response to strong end-product demand, particularly for our EWP. In addition, we have experienced COVID-19 related short-term disruptions at our BMD locations and our activity levels across our distribution network 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 due to 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 in 2021. Furthermore, with homeowners spending more time at home, repair and remodel spending may remain elevated as homeowners invest in existing homes. As of February 2021, the Blue Chip Economic Indicators consensus forecast for 2021 single- and multi-family housing starts in the U.S. was 1.51 million units, compared with actual housing starts of 1.38 million in 2020 and 1.29 million in 2019, as reported by the U.S. Census Bureau. Although we believe that current U.S. demographics support the higher level of forecasted housing starts, and many national home builders are reporting strong near-term backlogs, the impacts of COVID-19 on residential construction and residential repair-and-remodeling activity are uncertain.

Strong demand when coupled with capacity constraints in late fourth quarter 2020 and early first quarter 2021 created supply/demand imbalances in the marketplace and historically high pricing levels for commodity lumber and panel products. As a wholesale distributor of a broad mix of commodity products and a manufacturer of certain commodity products, our sales and profitability are influenced by changes in commodity product prices.

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 fourth quarter and full year earnings on Tuesday, February 23, 2021, at 11 a.m. Eastern.

To participate in the conference call, dial 844-795-4410 and use participant passcode 9687894 (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 Tuesday, February 23, 2021, at 2 p.m. Eastern through Tuesday, March 2, 2021, 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 9687894. 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

Year Ended

December 31

September 30,
2020

December 31

2020

2019

2020

2019

Sales

$

1,472,231

$

1,101,713

$

1,589,313

$

5,474,838

$

4,643,404

Costs and expenses

Materials, labor, and other operating expenses (excluding depreciation)

1,233,182

939,375

1,261,697

4,536,051

3,965,776

Depreciation and amortization

19,909

20,501

20,029

95,169

80,141

Selling and distribution expenses

102,366

98,280

122,884

428,279

390,739

General and administrative expenses

17,737

19,008

26,060

78,636

71,072

Loss on curtailment of facility

1,707

Other (income) expense, net

(103

)

(226

)

71

(33

)

(783

)

1,373,091

1,076,938

1,430,741

5,139,809

4,506,945

Income from operations

99,140

24,775

158,572

335,029

136,459

Foreign currency exchange gain

556

239

265

357

449

Pension expense (excluding service costs)

(6,466

)

(272

)

(302

)

(7,457

)

(2,474

)

Interest expense

(6,167

)

(6,596

)

(7,002

)

(26,223

)

(26,051

)

Interest income

41

1,066

113

999

2,811

Change in fair value of interest rate swaps

255

140

147

(2,426

)

(2,963

)

Loss on extinguishment of debt

(13,968

)

(13,968

)

(11,781

)

(5,423

)

(20,747

)

(48,718

)

(28,228

)

Income before income taxes

87,359

19,352

137,825

286,311

108,231

Income tax provision

(61,358

)

(4,705

)

(34,633

)

(111,332

)

(27,306

)

Net income

$

26,001

$

14,647

$

103,192

$

174,979

$

80,925

Weighted average common shares outstanding:

Basic

39,317

39,093

39,315

39,277

39,039

Diluted

39,587

39,418

39,526

39,431

39,242

Net income per common share:

Basic

$

0.66

$

0.37

$

2.62

$

4.45

$

2.07

Diluted

$

0.66

$

0.37

$

2.61

$

4.44

$

2.06

Dividends declared per common share

$

0.10

$

1.10

$

1.70

$

2.00

$

1.37

See accompanying summary notes to consolidated financial statements and segment information.

Wood Products Segment

Statements of Operations

(in thousands, except percentages)

 

Three Months Ended

Year Ended

December 31

September 30,
2020

December 31

2020

2019

2020

2019

Segment sales

$

358,661

$

296,286

$

363,674

$

1,323,901

$

1,275,167

Costs and expenses

Materials, labor, and other operating expenses (excluding depreciation)

292,425

261,611

268,930

1,075,015

1,117,540

Depreciation and amortization

13,669

14,589

13,938

71,141

57,671

Selling and distribution expenses

8,147

8,201

9,684

33,367

31,485

General and administrative expenses

3,508

3,962

5,084

15,055

14,442

Loss on curtailment of facility

1,707

Other (income) expense, net

64

(139

)

3

(104

)

(168

)

317,813

288,224

297,639

1,196,181

1,220,970

Segment income

$

40,848

$

8,062

$

66,035

$

127,720

$

54,197

(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)

81.5

%

88.3

%

73.9

%

81.2

%

87.6

%

Depreciation and amortization

3.8

%

4.9

%

3.8

%

5.4

%

4.5

%

Selling and distribution expenses

2.3

%

2.8

%

2.7

%

2.5

%

2.5

%

General and administrative expenses

1.0

%

1.3

%

1.4

%

1.1

%

1.1

%

Loss on curtailment of facility

%

%

%

0.1

%

%

Other (income) expense, net

%

%

%

%

%

88.6

%

97.3

%

81.8

%

90.4

%

95.7

%

Segment income

11.4

%

2.7

%

18.2

%

9.6

%

4.3

%

Building Materials Distribution Segment

Statements of Operations

(in thousands, except percentages)

 

Three Months Ended

Year Ended

December 31

September 30,
2020

December 31

2020

2019

2020

2019

Segment sales

$

1,330,078

$

986,969

$

1,437,683

$

4,952,018

$

4,137,719

Costs and expenses

Materials, labor, and other operating expenses (excluding depreciation)

1,156,836

859,102

1,201,722

4,258,784

3,617,477

Depreciation and amortization

5,846

5,331

5,686

22,460

20,769

Selling and distribution expenses

94,162

90,027

113,146

394,689

359,039

General and administrative expenses

6,322

6,365

9,282

28,945

24,785

Other (income) expense, net

(169

)

(110

)

(54

)

(354

)

(587

)

1,262,997

960,715

1,329,782

4,704,524

4,021,483

Segment income

$

67,081

$

26,254

$

107,901

$

247,494

$

116,236

(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)

87.0

%

87.0

%

83.6

%

86.0

%

87.4

%

Depreciation and amortization

0.4

%

0.5

%

0.4

%

0.5

%

0.5

%

Selling and distribution expenses

7.1

%

9.1

%

7.9

%

8.0

%

8.7

%

General and administrative expenses

0.5

%

0.6

%

0.6

%

0.6

%

0.6

%

Other (income) expense, net

%

%

%

%

%

95.0

%

97.3

%

92.5

%

95.0

%

97.2

%

Segment income

5.0

%

2.7

%

7.5

%

5.0

%

2.8

%

Segment Information

(in thousands)

 

Three Months Ended

Year Ended

December 31

September 30,
2020

December 31

2020

2019

2020

2019

Segment sales

Wood Products

$

358,661

$

296,286

$

363,674

$

1,323,901

$

1,275,167

Building Materials Distribution

1,330,078

986,969

1,437,683

4,952,018

4,137,719

Intersegment eliminations

(216,508

)

(181,542

)

(212,044

)

(801,081

)

(769,482

)

Total net sales

$

1,472,231

$

1,101,713

$

1,589,313

$

5,474,838

$

4,643,404

Segment income

Wood Products

$

40,848

$

8,062

$

66,035

$

127,720

$

54,197

Building Materials Distribution

67,081

26,254

107,901

247,494

116,236

Total segment income

107,929

34,316

173,936

375,214

170,433

Unallocated corporate costs

(8,789

)

(9,541

)

(15,364

)

(40,185

)

(33,974

)

Income from operations

$

99,140

$

24,775

$

158,572

$

335,029

$

136,459

Segment EBITDA (a)

Wood Products

$

54,517

$

22,651

$

79,973

$

198,861

$

111,868

Building Materials Distribution

72,927

31,585

113,587

269,954

137,005

See accompanying summary notes to consolidated financial statements and segment information.

Boise Cascade Company

Consolidated Balance Sheets

(in thousands)

 

December 31, 2020

December 31, 2019

ASSETS

Current

Cash and cash equivalents

$

405,382

$

285,237

Receivables

Trade, less allowances of $1,111 and $591

375,865

215,894

Related parties

201

568

Other

15,067

15,184

Inventories

503,480

497,596

Prepaid expenses and other

8,860

8,285

Total current assets

1,308,855

1,022,764

Property and equipment, net

461,456

476,949

Operating lease right-of-use assets

62,447

64,228

Finance lease right-of-use assets

29,523

21,798

Timber deposits

11,761

12,287

Goodwill

60,382

60,382

Intangible assets, net

16,574

17,797

Deferred income taxes

7,460

7,952

Other assets

7,260

9,194

Total assets

$

1,965,718

$

1,693,351

Boise Cascade Company

Consolidated Balance Sheets (continued)

(in thousands, except per-share data)

 

December 31, 2020

December 31, 2019

LIABILITIES AND STOCKHOLDERS' EQUITY

Current

Accounts payable

Trade

$

307,653

$

222,930

Related parties

1,199

1,624

Accrued liabilities

Compensation and benefits

118,400

83,943

Income taxes payable

8,101

Interest payable

8,477

6,723

Other

80,172

69,772

Total current liabilities

524,002

384,992

Debt

Long-term debt

443,792

440,544

Other

Compensation and benefits

25,951

45,586

Operating lease liabilities, net of current portion

56,001

58,029

Finance lease liabilities, net of current portion

31,607

23,419

Deferred income taxes

18,263

26,694

Other long-term liabilities

15,303

12,757

147,125

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

538,006

533,345

Accumulated other comprehensive loss

(1,078

)

(50,248

)

Retained earnings

452,334

356,698

Total stockholders' equity

850,799

701,330

Total liabilities and stockholders' equity

$

1,965,718

$

1,693,351

Boise Cascade Company

Consolidated Statements of Cash Flows

(in thousands)

 

Year Ended December 31

2020

2019

Cash provided by (used for) operations

Net income

$

174,979

$

80,925

Items in net income not using (providing) cash

Depreciation and amortization, including deferred financing costs and other

97,131

82,377

Stock-based compensation

7,820

7,973

Pension expense

8,125

3,121

Deferred income taxes

27,497

9,025

Change in fair value of interest rate swaps

2,426

2,963

Loss on curtailment of facility (excluding severance)

1,476

Other

169

(353

)

Loss on extinguishment of debt

13,968

Decrease (increase) in working capital, net of acquisitions

Receivables

(159,906

)

2,160

Inventories

(6,249

)

40,176

Prepaid expenses and other

(1,133

)

(132

)

Accounts payable and accrued liabilities

131,541

5,212

Pension contributions

(12,759

)

(5,238

)

Income taxes payable

9,022

19,387

Other

409

(1,949

)

Net cash provided by operations

294,516

245,647

Cash provided by (used for) investment

Expenditures for property and equipment

(79,429

)

(82,720

)

Acquisitions of businesses and facilities

(15,676

)

Proceeds from sales of facilities

2,493

Proceeds from sales of assets and other

713

1,838

Net cash used for investment

(78,716

)

(94,065

)

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

(79,195

)

(53,954

)

Tax withholding payments on stock-based awards

(3,309

)

(3,574

)

Other

(1,155

)

(488

)

Net cash used for financing

(95,655

)

(58,016

)

Net increase in cash and cash equivalents

120,145

93,566

Balance at beginning of the period

285,237

191,671

Balance at end of the period

$

405,382

$

285,237

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 2020 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 December 31, 2020 and 2019, and September 30, 2020, and the year ended December 31, 2020 and 2019:

 

Three Months Ended

Year Ended

 

December 31

September 30,
2020

December 31

 

2020

2019

2020

2019

 

(in thousands)

Net income

 

$

26,001

$

14,647

$

103,192

$

174,979

$

80,925

Interest expense

 

6,167

6,596

7,002

26,223

26,051

Interest income

 

(41

)

(1,066

)

(113

)

(999

)

(2,811

)

Income tax provision

 

61,358

4,705

34,633

111,332

27,306

Depreciation and amortization

 

19,909

20,501

20,029

95,169

80,141

EBITDA

 

113,394

45,383

164,743

406,704

211,612

Change in fair value of interest rate swaps

 

(255

)

(140

)

(147

)

2,426

2,963

Loss on extinguishment of debt

 

13,968

13,968

Adjusted EBITDA

 

$

113,139

$

45,243

$

178,564

$

423,098

$

214,575

The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the three months ended December 31, 2020 and 2019, and September 30, 2020, and the year ended December 31, 2020 and 2019:

 

Three Months Ended

Year Ended

 

December 31

September 30,
2020

December 31

 

2020

2019

2020

2019

 

(in thousands)

Wood Products

 

Segment income

 

$

40,848

$

8,062

$

66,035

$

127,720

$

54,197

Depreciation and amortization

 

13,669

14,589

13,938

71,141

57,671

EBITDA

 

$

54,517

$

22,651

$

79,973

$

198,861

$

111,868

 

Building Materials Distribution

 

Segment income

 

$

67,081

$

26,254

$

107,901

$

247,494

$

116,236

Depreciation and amortization

 

5,846

5,331

5,686

22,460

20,769

EBITDA

 

$

72,927

$

31,585

$

113,587

$

269,954

$

137,005

 

Corporate

 

Unallocated corporate costs

 

$

(8,789

)

$

(9,541

)

$

(15,364

)

$

(40,185

)

$

(33,974

)

Foreign currency exchange gain

 

556

239

265

357

449

Pension expense (excluding service costs)

 

(6,466

)

(272

)

(302

)

(7,457

)

(2,474

)

Change in fair value of interest rate swaps

 

255

140

147

(2,426

)

(2,963

)

Loss on extinguishment of debt

 

(13,968

)

(13,968

)

Depreciation and amortization

 

394

581

405

1,568

1,701

EBITDA

 

(14,050

)

(8,853

)

(28,817

)

(62,111

)

(37,261

)

Change in fair value of interest rate swaps

 

(255

)

(140

)

(147

)

2,426

2,963

Loss on extinguishment of debt

 

13,968

13,968

Corporate adjusted EBITDA

 

$

(14,305

)

$

(8,993

)

$

(14,996

)

$

(45,717

)

$

(34,298

)

 

Total company adjusted EBITDA

 

$

113,139

$

45,243

$

178,564

$

423,098

$

214,575

Contacts:

Investor Relations Contact - Wayne Rancourt
208-384-6073

Media Contact - Lisa Tschampl
208-384-6552

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