Boise Cascade Reports Third Quarter 2012 Financial Results

For Immediate Release: October 25, 2012

BOISE, Idaho - Boise Cascade Holdings, L.L.C. (Boise Cascade or Company) announced third quarter 2012 net income of $23.5 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $36.8 million. Year-to-date net income and EBITDA results of $40.2 million and $79.6 million, respectively, reflect a significant improvement over a net loss of $32.6 million and EBITDA of $8.9 million reported in the first nine months of 2011.  Sales in third quarter 2012 were $764.6 million, a 22% increase over the same quarter a year ago. Third quarter 2011 reported net loss and EBITDA were $3.7 million and $10.6 million, respectively. Second quarter 2012 net income and EBITDA were $15.0 million and $28.2 million, respectively. 
The Company generated $50.3 million of cash during the third quarter 2012 driven by improved operating results and working capital reductions. At September 30, 2012, Boise Cascade had total available liquidity of $483.8 million, with $224.4 million in cash and committed bank line availability of $259.4 million. On October 15, we redeemed $75 million of our 7 1/8% senior subordinated notes at par value. On October 22, the Company issued $250 million of 6 3/8% senior unsecured notes due November 1, 2020. The net proceeds from the offering were used to repay the remaining $144.6 million of our 7 1/8% senior subordinated notes and enhance our cash position by nearly $100 million.
U.S. housing starts increased approximately 28% in third quarter 2012 from the levels experienced in third quarter 2011. Housing start levels remain significantly below the last 10 year historical average of approximately 1.3 million units per year. Blue Chip consensus forecast for U.S. housing starts for 2012 was 760,000 as of October 10, 2012.  The final U.S. housing starts level reported for 2011 was 609,000.
"We experienced a third consecutive quarter of sequentially improved income from operations, resulting in $50 million of cash generated and $37 million of EBITDA in the third quarter, underscored by strong plywood prices. The cash generated, together with our recently completed debt refinancing, has strengthened our liquidity position and allows us greater flexibility to take advantage of improvement in the markets and of business opportunities," stated Tom Carlile, CEO. "We are encouraged by the improved operating environment and remain cautiously optimistic the recent improvement in demand for our products will carry into 2013." 
Building Materials Distribution (BMD) segment sales were $605.2 million in third quarter 2012, up 21% from the same quarter a year ago. Volumes for the segment were up approximately 8%, with prices up about 13%. In third quarter 2012, BMD reported $12.6 million of EBITDA compared to $8.2 million in third quarter 2011 and $10.9 million in second quarter 2012.
Wood Products segment sales in the third quarter 2012 were $259.8 million, up 33% from the same quarter a year ago. The increase in sales was due primarily to higher plywood volumes and prices and increased EWP shipments, offset in part by lower EWP sales price realizations. In third quarter 2012, Wood Products reported $28.6 million of EBITDA compared to $7.1 million in third quarter 2011 and $21.7 million in second quarter 2012.

Outlook
The housing industry is showing signs of improvement in many areas within the U.S.; however, we expect to continue to experience below historical demand for the products we distribute and manufacture. Favorable commodity wood product prices experienced year to date began to decline mid-September 2012 and could be volatile in response to operating rates and inventory levels in various distribution channels. We expect to manage our production levels to our sales demand, which will likely result in us operating some of our facilities below their capacity. 

About Boise Cascade
Boise Cascade is a leading U.S. wholesale distributor of building products and one of the largest producers of engineered wood products and plywood in North America. The Company is privately held and headquartered in Boise, Idaho. For more information, please visit our website at www.bc.com. 

Webcast and Conference Call
Boise Cascade will host a webcast and conference call on Thursday, October 25, at 11 a.m. Eastern, at which time we will review the Company's recent performance. You can join the webcast through the Boise Cascade website. Go to www.bc.com and click on the link to the webcast under the News & Events heading. Please go to the website at least 15 minutes before the start of the webcast to register. To join the conference call, dial 800-573-4842 (international callers should dial 617-224-4327), participant passcode 79973836, at least 10 minutes before the start of the call.
The archived webcast will be available in the News & Events section of Boise Cascade's website. A replay of the conference call will be available from Thursday, October 25, at 2 p.m. Eastern through Thursday, November 1, at 11 p.m. Eastern. Playback numbers are 888-286-8010 for U.S. calls and 617-801-6888 for international calls, and the passcode will be 79269575.

Basis of Presentation
We present our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Our earnings release also supplements the GAAP presentations by reflecting EBITDA, a non-GAAP financial measure. EBITDA represents income (loss) before interest (interest expense and interest income), income taxes, and depreciation and amortization. EBITDA is the primary measure used by our chief operating decision maker to evaluate segment operating performance and to decide how to allocate resources to segments.  We believe EBITDA is useful to investors because it provides a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that are used by our internal decision makers and because it is 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. We believe EBITDA is a meaningful measure because it presents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. EBITDA, however, is not a measure of our liquidity or financial performance under GAAP and should not be considered as an alternative to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.  The use of EBITDA instead of net income (loss) or segment income (loss) has limitations as an analytical tool, 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 the limitations of EBITDA by relying on our GAAP results. Our measure of EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.

Forward-Looking Statements
This news release contains statements that are "forward looking" within the Private Securities Litigation Reform Act of 1995. These statements speak only as of the date of this press release. While they are based on the current expectations and beliefs of management, they are subject to a number of uncertainties and assumptions that could cause actual results to differ from the expectations expressed in this release.

Boise Cascade Holdings, L.L.C.
Consolidated Statements of Income (Loss)
(unaudited, in thousands)

Segment Information
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Boise Cascade Holdings, L.L.C.
Consolidated Balance Sheets
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Boise Cascade Holdings, L.L.C.
Consolidated Balance Sheets (continued)
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Boise Cascade Holdings, L.L.C.
Consolidated Statements of Cash Flows
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Summary Notes to Consolidated Financial Statements and Segment Information

            The Consolidated Statements of Income (Loss), Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information do not include all Notes to Consolidated Financial Statements and should be read in conjunction with the company's 2011 Form 10-K and the company's Quarterly Report on Form 10-Q for the period ended September 30, 2012. Net income (loss) for all periods presented involved estimates and accruals.

1. 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 September 30, 2012 and 2011, and June 30, 2012, and the nine months ended September 30, 2012 and 2011: