Boise Cascade Company Fourth Quarter 2012 Earnings Webcast March - - PowerPoint PPT Presentation

Boise Cascade Company

Fourth Quarter 2012 Earnings Webcast

March 7, 2013

Slide 2



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 non- GAAP 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.

Forward-Looking Statements

March 7, 2013

Slide 3

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.

March 7, 2013

Slide 4



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

• rganization’s capabilities



Return capital to our shareholders in line with business results and investment opportunities

March 7, 2013

Shareholder Value Priorities

Slide 5

4Q 2012 Financial Highlights

180.3 230.5 429.4 553.1 (62.2) (89.0)

($200) ($100) $0 $100 $200 $300 $400 $500 $600 $700 $800

4Q 2011 4Q 2012

Sales

Wood BMD Eliminations

$547.4 $694.6 +27%

$ Millions

2.2 13.2 1.3 8.1 (3.0) (4.3)

• $10
• $5

$0 $5 $10 $15 $20 $25

4Q 2011 4Q 2012

EBITDA

Wood BMD Corporate

$0.5 $17.0 +3020%

$ Millions March 7, 2013

Slide 6

2012 Financial Highlights

712.5 943.3 1,779.4 2,190.2 (243.7) (354.4)

($1,000) ($500) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500

2011 2012

Sales

Wood BMD Eliminations

$2,248.1 $2,779.1 +24%

$ Millions

13.3 80.2 10.4 32.9 (14.2) (16.5)

($40) ($20) $0 $20 $40 $60 $80 $100 $120

2011 2012

EBITDA

Wood BMD Corporate

$9.5 $96.6 +919%

$ Millions March 7, 2013

Slide 7

Wood Products Plywood

240 286 296 284 328 346 343 339

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

(mmsf 3/8” basis) 232 230 229 238 267 290 318 304

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

($/msf 3/8” basis)

2011 2012

Sales Volume Net Sales Price

March 7, 2013

Slide 8

Wood Products EWP

LVL

($/melf)

I-Joists

($/cf)

2011 2012

(mmcf) (mmelf)

16.1 15.9 15.5 14.5 15.1 14.9 14.8 14.5

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

1.6 1.8 1.9 1.8 2.1 2.3 2.6 2.1

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

974 976 958 919 935 928 915 909

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

22 32 31 26 30 39 42 35

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

March 7, 2013

Slide 9

378 471 501 429 451 581 605 553 $0 $100 $200 $300 $400 $500 $600 $700 1Q 2Q 3Q 4Q

($ Millions)

2011 2012

51 46 46 47 50 48 49 52 38 42 41 39 37 39 36 34 11 12 13 14 13 13 15 14 20 40 60 80 100

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12

(% of Sales)

Commodity General Line EWP

Building Materials Distribution Sales

March 7, 2013

Slide 10

Debt and Liquidity Highlights

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 of a $31.3 million availability threshold at 12/31/2011.

($ Millions) Pro Forma for IPO 12/31/2012 12/31/2011 Net Debt Long-term debt 250.0 $ 275.0 $ 219.6 $ Cash & cash equivalents1 (292.5) (54.5) (182.5) Net debt (cash)1 (42.5) $ 220.5 $ 37.1 $ Liquidity Position ABL excess availability2 195.6 $ 195.6 $ 141.8 $ Cash & cash equivalents1 292.5 54.5 182.5 Total liquidity1 488.1 $ 250.1 $ 324.3 $

March 7, 2013

Slide 11 March 7, 2013

Working Capital

($ Millions) 2012 2011 Change Receivables 141.6 $ 123.9 $ 17.7 $ Inventory 325.8 284.0 41.8 Other Current Assets (excluding cash) 5.5 4.9 0.7 473.0 412.8 60.2 Accounts Payable 142.1 117.9 24.2 Accrued Liabilities 94.0 60.1 34.0 236.2 178.0 58.2 Net Working Capital (excluding cash) 236.8 $ 234.8 $ 2.0 $

Slide 12 March 7, 2013

Cash Flow Highlights

($ Millions) 2012 2011 Net Cash Provided By (Used For) Operations 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) Cash Balance at Beginning of Period 182.5 264.6 Cash Balance at End of Period 54.5 $ 182.5 $

Slide 13

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.

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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

• f improved demand. Capacity restarts have been announced by a number
• f 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.

March 7, 2013

Appendix

March 7, 2013

Slide 15

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) for IPO 12/31/2012 12/31/2011 Long-term debt 250.0 $

(A)

275.0 $ 219.6 $ Less cash and cash equivalents (292.5)

(B)

(54.5) (182.5) Net debt (cash) (42.5) $ 220.5 $ 37.1 $

March 7, 2013 (A) Long-term debt at 12/31/2012 $ 275.0 Payment on Revolving Credit Facility with proceeds from IPO (25.0) Pro forma long-term debt $ 250.0 (B) 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 $ 292.5

Slide 16

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) 4Q12 4Q11 3Q12 Net income (loss) 1.3 $ (13.8) $ 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 17.0 $ 0.5 $ 36.8 $

March 7, 2013

Slide 17

Appendix

The following table reconciles net income (loss) to EBITDA for the years ended December 31, 2012 and 2011:

Year Ended December 31 ($ Millions) 2012 2011 Net income (loss) 41.5 $ (46.4) $ Interest expense 21.8 19.0 Interest income (0.4) (0.4) Income tax provision 0.3 0.2 Depreciation and amortization 33.4 37.0 EBITDA 96.6 $ 9.5 $

March 7, 2013

Slide 18

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) 4Q12 4Q11 3Q12 Building Materials Distribution Segment income (loss) 5.9 $ (0.8) $ 10.3 $ Depreciation and amortization 2.2 2.2 2.3 Segment EBITDA 8.1 $ 1.3 $ 12.6 $ Wood Products Segment income (loss) 7.0 $ (5.1) $ 22.5 $ Depreciation and amortization 6.3 7.3 6.2 Segment EBITDA 13.2 $ 2.2 $ 28.6 $

March 7, 2013

Slide 19

Appendix

The following table reconciles segment income (loss) to segment EBITDA for the years ended December 31, 2012 and 2011:

Year Ended December 31 ($ Millions) 2012 2011 Building Materials Distribution Segment income 24.0 $ 2.0 $ Depreciation and amortization 8.8 8.4 Segment EBITDA 32.9 $ 10.4 $ Wood Products Segment income (loss) 55.8 $ (15.1) $ Depreciation and amortization 24.4 28.4 Segment EBITDA 80.2 $ 13.3 $

March 7, 2013