Boise Cascade Company Second Quarter 2013 Earnings Webcast July - - PowerPoint PPT Presentation

Boise Cascade Company

Second Quarter 2013 Earnings Webcast

July 23, 2013

Slide 2

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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.

Forward-Looking Statements

July 23, 2013

Slide 3

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

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Commodity pricing began a steep descent early in the second quarter with composite panel and lumber prices dropping more than 25% by quarter end

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Announced agreement to acquire two plywood facilities in southeastern United States

July 23, 2013

Slide 4

200 240 280 320 360 400 440 480

1 3 5 7 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

Second Quarter Third Quarter Fourth Quarter First Quarter

July 23, 2013

Composite Lumber Price

Source: Random Lengths

Slide 5

240 280 320 360 400 440 480 520 560

1 3 5 7 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

Second Quarter Third Quarter Fourth Quarter First Quarter

July 23, 2013

Panel Composite Price

Source: Random Lengths

Slide 6

2Q 2013 Financial Highlights

241.8 280.4 580.5 681.5 (89.4) (109.6)

($200) ($100) $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

2Q 2012 2Q 2013

Sales

Wood BMD Eliminations

$732.9 $852.3 +16%

$ Millions

21.7 29.6 10.9 5.5 (4.4) (4.4)

• $5

$0 $5 $10 $15 $20 $25 $30 $35 $40

2Q 2012 2Q 2013

EBITDA

Wood BMD Corporate

$28.2 $30.7 +9%

$ Millions July 23, 2013

Slide 7

Wood Products Plywood

328 346 343 339 346 355

50 100 150 200 250 300 350 400 1Q 2Q 3Q 4Q

(mmsf 3/8” basis) 267 290 318 304 331 328

$0 $50 $100 $150 $200 $250 $300 $350 1Q 2Q 3Q 4Q

($/msf 3/8” basis)

2012 2013

Sales Volume Net Sales Price

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Slide 8

Wood Products EWP

LVL

($/melf)

I-Joists

($/cf)

2012 2013

(mmcf) (mmelf)

15.1 14.9 14.8 14.5 15.3 15.7

$10 $12 $14 $16 $18 1Q 2Q 3Q 4Q

2.1 2.3 2.6 2.1 2.7 2.7

0.0 0.5 1.0 1.5 2.0 2.5 3.0 1Q 2Q 3Q 4Q

935 928 915 909 964 989

$500 $600 $700 $800 $900 $1,000 1Q 2Q 3Q 4Q

30 39 42 35 41 44

5 10 15 20 25 30 35 40 45 1Q 2Q 3Q 4Q

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Slide 9

451 581 605 553 581 681 $0 $100 $200 $300 $400 $500 $600 $700 $800 1Q 2Q 3Q 4Q

($ Millions)

2012 2013

50 48 49 52 54 51 37 39 36 34 31 35 13 13 15 14 15 14 20 40 60 80 100

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

(% of Sales)

Commodity General Line EWP

Building Materials Distribution Sales

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Slide 10

Working Capital

July 23, 2013

($ Millions) 6/30/2013 3/31/2013 Change Receivables 212.8 $ 209.9 $ 2.9 $ Inventory 368.4 387.1 (18.7) Other current assets (excluding cash and deferred taxes) 11.9 8.3 3.6 593.1 605.3 (12.2) Accounts payable 197.2 218.5 (21.3) Accrued liabilities 75.7 82.6 (6.9) 272.9 301.1 (28.2) Net working capital (excluding cash and deferred taxes) 320.2 $ 304.2 $ 16.0 $

Slide 11

Debt and Liquidity Highlights

($ Millions) 6/30/2013 3/31/2013 Net Debt Long-term debt 250.0 $ 250.0 $ Cash & cash equivalents (232.7) (233.5) Net debt 17.3 $ 16.5 $ Liquidity Position ABL excess availability 290.7 $ 290.2 $ Cash & cash equivalents 232.7 233.5 Total liquidity 523.4 $ 523.8 $

July 23, 2013

Slide 12

Outlook

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The current consensus estimate for 2013 U.S. housing starts is 990,000 vs. 780,000 in 2012.

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We believe the long-term demand fundamentals for housing are still sound based on demographics in the U.S.

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We are focused on meeting our customers’ needs as demand continues to strengthen.

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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.

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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.

July 23, 2013

Appendix

July 23, 2013

Slide 14

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) 2Q13 2Q12 1Q13 Net income 10.4 $ 15.0 $ 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 30.7 $ 28.2 $ 33.0 $

July 23, 2013

Slide 15

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) 2Q13 2Q12 1Q13 Wood Products Segment income 23.0 $ 15.5 $ 20.8 $ Depreciation and amortization 6.5 6.1 6.3 Segment EBITDA 29.6 $ 21.7 $ 27.1 $ Building Materials Distribution Segment income 3.3 $ 8.7 $ 8.0 $ Depreciation and amortization 2.2 2.2 2.2 Segment EBITDA 5.5 $ 10.9 $ 10.2 $

July 23, 2013

Slide 16

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) 2Q13 2Q12 1Q13 Net income (GAAP basis) 10.4 $ 15.0 $ 80.8 $ Impact of deferred tax benefit

• (68.7)

Adjusted net income (non-GAAP basis) 10.4 $ 15.0 $ 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: Basic 0.24 $ 0.51 $ 0.32 $ Diluted 0.24 $ 0.51 $ 0.32 $

July 23, 2013