Boise Cascade Company Reports Financial Results for First Quarter 2013

For Immediate Release:  April 22, 2013

BOISE, Idaho - Boise Cascade Company (Boise Cascade or Company) (NYSE:  BCC) today reported financial results for its quarter ended March 31, 2013.

First Quarter 2013 Highlights

• On February 11, 2013, we issued 13,529,412 shares of common stock in our initial public offering.  As a result of this initial public offering, we received proceeds of $262.7 million, net of underwriting discounts and offering expenses.
   
• First quarter sales of $744.9 million were 27% above the same quarter in 2012.  Wood Products first quarter segment sales, including sales to the Company's Building Materials Distribution (BMD) segment, were $269.2 million, an increase of 28% from the year ago quarter.  BMD segment sales were $581.1 million, an increase of 29% from the year ago quarter.
   
• The Company reported net income of $80.8 million in the first quarter, which included a $68.7 million income tax benefit associated with recording net deferred tax assets upon our conversion to a corporation in February 2013.  Net income for the quarter excluding the tax item was $12.2 million, or $0.32 per share, on 37.6 million weighted average shares outstanding.  Net income in first quarter 2012 was $1.7 million, or $0.06 per share, on 29.7 million weighted averages shares outstanding.  As of April 22, the Company had 43.2 million shares outstanding.
   
• Wood Products reported first quarter 2013 segment earnings before interest, taxes, depreciation, and amortization (EBITDA) of $27.1 million, up 62% from the $16.7 million reported in the same period in 2012.
   
• BMD reported segment EBITDA of $10.2 million, a sharp improvement from the $1.4 million reported in first quarter 2012.

      Total and single-family U.S. housing starts improved approximately 36% and 28%, respectively, from the same period last year.  Housing start levels remain below the historical average for the last 20 years of approximately 1.4 million units per year.  The April 2013 Blue Chip consensus forecast for 2013 reflects 1,000,000 U.S. housing starts, a 28% increase from 2012 levels.

      "2013 has started with strong commodity pricing for structural panels and lumber, which clearly contributed to our financial performance in both operating segments.  Demand improved compared to the prior year quarter primarily driven by increased new home construction activity.  Our businesses are doing a good job of leveraging the stronger housing-related activity into higher sales and earnings," commented Tom Carlile, CEO.

¹Reconciliations between our results reported in accordance with U.S. generally accepted accounting principles (GAAP) and adjusted net income and EBITDA are included in the summary notes at the end of this press release.

Wood Products Segment

            Wood Products segment sales in the first quarter were $269.2 million, up 28% from the same quarter a year ago.  The sales increase was attributable primarily to 24% higher plywood sales prices, 28% higher laminated veneer lumber (LVL) sales volumes, and 37% higher I-joist sales volumes.  Higher lumber sales volumes and prices, as well as plywood sales volumes also contributed to segment sales growth.  The segment reported EBITDA of $27.1 million for the quarter, compared with $16.7 million reported in first quarter 2012.  The main factors contributing to the improved financial performance were improved plywood, lumber, and EWP pricing, offset partially by higher wood fiber costs.

Building Materials Distribution Segment

               BMD segment sales were $581.1 million in the first quarter, up 29% from the same quarter a year ago.  Price changes accounted for approximately 18% of the sales gain, with shipment volumes up approximately 9%.  The largest sales gains were in commodity products and engineered wood products categories, with lower sales growth in general line products.  BMD reported quarterly EBITDA of $10.2 million compared to $1.4 million in first quarter 2012.  Gross margins at 11.0% were down 0.5% from the 11.5% reported in first quarter 2012; however, positive sales growth leverage on selling and distribution expenses, as well as on general and administrative expenses, contributed to significantly improved earnings in the segment.

Balance Sheet

               Boise Cascade received net IPO proceeds of $262.7 million in February and ended the first quarter with $233.5 million of cash.  At March 31, 2013, the Company had $290.2 million of undrawn committed bank line availability, for total available liquidity of $523.8 million including cash.  The Company reported $250.0 million of long-term debt, which was down $25.0 million from year-end 2012.

Outlook

               We expect to continue to experience demand below 20-year average historical levels for the products we manufacture and distribute.  However, the housing industry has shown signs of improvement in the U.S. and we remain optimistic that the recent improvement in demand for our products will continue.  Commodity wood product prices in first quarter 2013, including structural panels and lumber, were well above 5-year average historical levels.  Future pricing 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 operating our engineered wood products facilities below their capacity until demand improves further.

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 our website at www.bc.com. 

Webcast and Conference Call

Boise Cascade will host a webcast and conference call on Monday, April 22, at 11 a.m. Eastern, at which time we will review the company's recent performance. You can join the webcast through our website by going to www.bc.com and clicking on the Event Calendar link under the Investor Relations heading. Please go to the website at least 15 minutes before the start of the webcast to register. To join the conference call, dial 866-277-1184 (international callers should dial 617-597-5360), participant passcode 76736434, at least 10 minutes before the start of the call.

The archived webcast will be available in the Investor Relations section of our website. A replay of the conference call will be available from Monday, April 22, at 2 p.m. Eastern through Monday, April 29, 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 85535636.

Basis of Presentation

We present our consolidated financial statements in accordance with GAAP. Our earnings release also supplements the GAAP presentations by reflecting EBITDA, a non-GAAP financial measure. EBITDA is defined as 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 Company
Consolidated Statements of Operations
(unaudited, in thousands, except per-share data)

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

Wood Products Segment
Statements of Operations
(unaudited, in thousands)

Building Materials Distribution Segment
Statements of Operations
(unaudited, in thousands)

Segment Information
(unaudited, in thousands)

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

Boise Cascade Company
Consolidated Balance Sheets
(unaudited, in thousands)

Boise Cascade Company
Consolidated Balance Sheets (continued)
(unaudited, in thousands, except per-share data)

Boise Cascade Company
Consolidated Statements of Cash Flows
(unaudited, in thousands)

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 do not include all Notes to Consolidated Financial Statements and should be read in conjunction with the company's 2012 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)  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 March 31, 2013 and 2012, and December 31, 2012:

(b)  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 March 31, 2013 and 2012, and December 31, 2012: