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October 24, 2016 6:04 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 24, 2016
BOISE CASCADE COMPANY
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
 
001-35805
(Commission
File Number)
 
20-1496201
(IRS Employer
Identification No.)
1111 West Jefferson Street, Suite 300
Boise, Idaho 83702-5389
(Address of principal executive offices) (Zip Code)
(208) 384-6161
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02 Results of Operations and Financial Condition.
On October 24, 2016, we issued an earnings release announcing our third quarter 2016 financial results, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Additionally, Exhibit 99.2, a copy of which is furnished, includes certain statistical information relative to our quarterly performance.
We have reconciled the non-GAAP financial measures to our reported financial performance in the financial notes that accompany our earnings release.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished as part of this Report on Form 8-K:
Exhibit
 
Description
 
 
 
Exhibit 99.1
 
Boise Cascade Company Earnings Release dated October 24, 2016.
 
 
 
Exhibit 99.2
 
Boise Cascade Company Quarterly Statistical Information for third quarter 2016.






SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
BOISE CASCADE COMPANY
 
 
 
 
By
/s/ John T. Sahlberg
 
 
John T. Sahlberg
Senior Vice President, Human Resources and General Counsel
Date: October 24, 2016
 
 






Boise Cascade
 
Exhibit 99.1
 
1111 West Jefferson Street Ste 300 PO Box 50 Boise, ID 83728
 
 
 
News Release
bcclogo1q2016a02.jpg
Investor Relations Contact - Wayne Rancourt
208 384 6073
 
Media Contact - John Sahlberg
208 384 6451

For Immediate Release: October 24, 2016

Boise Cascade Company Reports 2016 Third Quarter Net Income of
$10.0 Million on Sales of $1,067.2 Million

BOISE, Idaho - Boise Cascade Company (Boise Cascade or Company) (NYSE: BCC) today reported net income of $10.0 million, or $0.26 per share, on sales of $1,067.2 million for the third quarter ended September 30, 2016. Third quarter results included a $9.5 million pre-tax loss on the extinguishment of debt, or a $0.15 per share after-tax impact, as the Company refinanced its senior notes at a lower interest rate with an extended maturity.

Third Quarter 2016 Highlights
 
3Q 2016
 
3Q 2015
 
% change
 
 
 
 
 
 
 
(thousands, except per-share data and percentages)
 
 
 
 
 
 
Consolidated Results
 
 
 
 
 
Sales
$
1,067,214

 
$
991,580

 
8
 %
Net income
9,981

 
22,007

 
(55
)%
Net income per common share - diluted
0.26

 
0.56

 
(54
)%
EBITDA1
50,726

 
54,541

 
(7
)%
 
 
 
 
 
 
Segment Results
 
 
 
 
 
Wood Products sales
$
340,928

 
$
340,621

 
—
 %
Wood Products income
11,564

 
21,876

 
(47
)%
Wood Products EBITDA1
27,189

 
32,925

 
(17
)%
 
 
 
 
 
 
Building Materials Distribution sales
889,026

 
798,982

 
11
 %
Building Materials Distribution income
26,415

 
22,684

 
16
 %
Building Materials Distribution EBITDA1
29,929

 
25,805

 
16
 %
 
 
 
 
 
 
Corporate loss
(6,712
)
 
(4,268
)
 
(57
)%
Corporate EBITDA1
(6,392
)
 
(4,189
)
 
(53
)%
1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.

In third quarter 2016, total U.S. housing starts decreased by approximately 2% compared to the same period last year, driven by an approximate 9% decrease in the volatile multi-family segment. Single-family starts, which are the primary driver of our sales, increased approximately 2% in third quarter 2016 and have increased


approximately 9% on a year-to-date basis. Total U.S. housing starts from the October 2016 Blue Chip consensus forecast for 2016 and 2017 reflect 1.18 million and 1.28 million, respectively, or expected annual increases of 6% and 8%.

“Both of our businesses executed well during the quarter,” stated Tom Corrick, CEO. "Our distribution business posted another outstanding quarter. In our manufacturing business, elevated oriented strand board costs used in the manufacture of I-joists, planned downtime in plywood, along with ramp-up and transition activities at the recently acquired Thorsby and Roxboro engineered wood products facilities, have and will continue to negatively impact our near-term results. However, we have made great progress on key capital projects, including the restart of laminated veneer lumber production at Roxboro and the recently completed dryer projects at our Florien, Louisiana and Chester, South Carolina plywood operations. These projects leave us well positioned as we look forward to the 2017 building season."

Wood Products

Sales, including sales to Building Materials Distribution (BMD), increased $0.3 million to $340.9 million for the three months ended September 30, 2016, from $340.6 million for the three months ended September 30, 2015. The slight increase in sales was driven primarily by increases in sales volumes of laminated veneer lumber and I-joists (collectively EWP). These EWP volume increases were due primarily to our acquisition of two engineered wood products facilities on March 31, 2016, as well as improved single-family housing starts. These increases were offset by decreases in plywood and lumber sales volumes compared to the year ago quarter. Sales prices for EWP, plywood, and lumber were relatively flat compared with the same period in the prior year.

Wood Products segment income decreased $10.3 million to $11.6 million for the three months ended September 30, 2016, from $21.9 million for the three months ended September 30, 2015. The decline in income was due primarily higher oriented strand board costs used in the manufacture of I-joists, as well as higher conversion costs resulting from lower plywood and lumber sales volumes. In addition, depreciation and amortization expense increased $4.6 million due primarily to the acquisition of two EWP facilities on March 31, 2016, and other capital expenditures.

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

 
 
3Q 2016 vs. 3Q 2015
 
3Q 2016 vs. 2Q 2016
 
 
 
 
 
 Average Net Selling Prices
 
 
 
 
    LVL
 
—%
 
(1)%
    I-joists
 
(1)%
 
(3)%
    Plywood
 
2%
 
6%
Lumber
 
1%
 
4%
 Sales Volumes
 
 
 
 
    LVL
 
17%
 
(4)%
    I-joists
 
8%
 
(5)%
    Plywood
 
(7)%
 
2%
Lumber
 
(16)%
 
(7)%

Building Materials Distribution

Sales increased $90.0 million, or 11%, to $889.0 million for the three months ended September 30, 2016, from $799.0 million for the three months ended September 30, 2015. Compared with the same quarter in the prior year, the overall increase in sales was driven by sales volume and sales price increases of 8% and 3%, respectively. By product line, commodity sales increased 15%, general line product sales increased 7%, and sales of EWP (substantially all of which are sourced through our Wood Products segment) increased 11%.


2

BMD segment income increased $3.7 million to $26.4 million for the three months ended September 30, 2016, from $22.7 million for the three months ended September 30, 2015. The increase in income was driven primarily by a higher gross margin of $10.8 million generated from a sales increase of 11%, offset partially by increased selling and distribution expenses and general and administrative expenses of $6.1 million and $1.0 million, respectively.

Corporate and Other

Segment loss was $6.7 million for the three months ended September 30, 2016, compared with $4.3 million for the three months ended September 30, 2015. The change was due primarily to higher incentive compensation costs, professional fees, and pension expense.

Balance Sheet

Boise Cascade ended the third quarter with $131.2 million of cash and cash equivalents and $122.9 million of restricted cash deposits with the trustee for its 6.375% senior notes (2020 Notes). At September 30, 2016, we had $354.8 million of undrawn committed bank line availability, for total available liquidity (cash and cash equivalents and undrawn committed bank line availability) of $486.0 million. The Company reported $581.6 million of outstanding debt at September 30, 2016.

On August 29, 2016, we issued $350 million of 5.625% senior notes due September 1, 2024 (2024 Notes). In connection with the 2024 Notes issuance, we commenced a tender offer to purchase any and all of our $300.0 million aggregate principal amount of 2020 Notes then outstanding. Concurrently, we accepted for purchase an aggregate principal amount of $184.5 million of the 2020 Notes that were tendered. In connection with these transactions, we recognized a pre-tax loss on the extinguishment of debt of $9.5 million during the third quarter of 2016. On August 29, 2016, we irrevocably deposited $122.9 million of cash with the trustee of our 2020 Notes to pay the remaining $115.5 million principal amount, call premium, and all interest payable on November 1, 2016. Accordingly, we expect to recognize an additional pre-tax loss on the extinguishment of debt of $4.8 million in the fourth quarter of 2016.

Outlook

The Company expects its capital expenditures during 2016 to be $85-$95 million, inclusive of capital spending associated with the recently acquired EWP facilities. During 2017, the Company expects its capital expenditures to be $70-$80 million.

We expect to experience seasonally slower demand in fourth quarter 2016. On an annual basis, housing starts in the U.S. continue to show modest improvement and we remain optimistic that the improvement in demand for our products will continue as household formation rates and residential construction recover. We expect to manage our production levels to our sales demand, which will likely result in operating some of our facilities below their capacity, and could also include temporary plant curtailments in our plywood operations. In addition, maintenance related capital projects at our plywood plant in Chester, South Carolina, will cause that facility to be down for approximately one month during the fourth quarter. Future commodity product pricing could be volatile in response to industry operating rates, net import and export activity, inventory levels in our distribution channels, and seasonal demand patterns.

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, October 24, at 11 a.m. Eastern, at which time we will review the Company's third quarter.

3


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 844-795-4410 (international callers should dial 661-378-9637), participant passcode 99522546, 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, October 24, at 2 p.m. Eastern through Monday, October 31, at 2 p.m. Eastern. Replay numbers are 855-859-2056 for U.S. calls and 404-537-3406 for international calls, and the passcode will be 99522546.

Basis of Presentation

We refer to the term EBITDA in this earnings release as a supplemental measure of our performance and liquidity that is not required by or presented in accordance with generally accepted accounting principles in the United States ("GAAP"). We define EBITDA as income before interest (interest expense, interest income, change in fair value of interest rate swaps, and loss on extinguishment of debt), income taxes, and depreciation and amortization.

EBITDA is the primary measure used by our management 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 management 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, income 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 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 these limitations 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.

4



Boise Cascade Company
Consolidated Statements of Operations
(unaudited, in thousands, except per-share data)
 
Three Months Ended
 
Nine Months Ended
 
September 30
 
June 30,
2016
 
September 30
 
2016
 
2015
 
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
Sales
$
1,067,214

 
$
991,580

 
$
1,043,773

 
$
2,991,682

 
$
2,756,880

 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
922,101

 
854,134

 
894,715

 
2,586,360

 
2,383,756

Depreciation and amortization
19,459

 
14,249

 
18,552

 
53,249

 
41,117

Selling and distribution expenses
80,026

 
72,668

 
76,855

 
224,922

 
202,802

General and administrative expenses
14,367

 
11,345

 
15,612

 
46,031

 
35,371

Other (income) expense, net
(46
)
 
(1,256
)
 
172

 
(1,459
)
 
(1,653
)
 
1,035,907

 
951,140

 
1,005,906

 
2,909,103

 
2,661,393

 
 
 
 
 
 
 
 
 
 
Income from operations
31,307

 
40,440

 
37,867

 
82,579

 
95,487

 
 
 
 
 
 
 
 
 
 
Foreign currency exchange gain (loss)
(40
)
 
(148
)
 
28

 
186

 
(214
)
Interest expense
(7,135
)
 
(5,729
)
 
(6,427
)
 
(19,364
)
 
(16,801
)
Interest income
60

 
73

 
27

 
236

 
221

Change in fair value of interest rate swaps
836

 
—

 
(1,532
)
 
(765
)
 
—

Loss on extinguishment of debt
(9,525
)
 
—

 
—

 
(9,525
)
 
—

 
(15,804
)
 
(5,804
)
 
(7,904
)
 
(29,232
)
 
(16,794
)
 
 
 
 
 
 
 
 
 
 
Income before income taxes
15,503

 
34,636

 
29,963

 
53,347

 
78,693

Income tax provision
(5,522
)
 
(12,629
)
 
(10,735
)
 
(19,188
)
 
(28,839
)
Net income
$
9,981

 
$
22,007

 
$
19,228

 
$
34,159

 
$
49,854

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
  Basic
38,814

 
39,127

 
38,814

 
38,827

 
39,372

  Diluted
39,120

 
39,240

 
38,972

 
38,950

 
39,473

 
 
 
 
 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
 
 
 
 
  Basic
$
0.26

 
$
0.56

 
$
0.50

 
$
0.88

 
$
1.27

  Diluted
$
0.26

 
$
0.56

 
$
0.49

 
$
0.88

 
$
1.26



5


Wood Products Segment
Statements of Operations
(unaudited, in thousands, except percentages)
 
Three Months Ended
 
Nine Months Ended
 
September 30
 
June 30,
2016
 
September 30
 
2016
 
2015
 
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
Segment sales
$
340,928

 
$
340,621

 
$
346,358

 
$
990,743

 
$989,806
 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 

 
 

 
 

 
 

Materials, labor, and other operating expenses (excluding depreciation)
302,667

 
299,744

 
303,803

 
880,412

 
864,440

Depreciation and amortization
15,625

 
11,049

 
14,769

 
42,028

 
32,181

Selling and distribution expenses
7,594

 
6,465

 
8,108

 
23,077

 
20,170

General and administrative expenses
2,978

 
2,456

 
3,173

 
12,249

 
7,482

Other (income) expense, net
500

 
(969
)
 
196

 
(781
)
 
(951
)
 
329,364

 
318,745

 
330,049

 
956,985

 
923,322

 
 
 
 
 
 
 
 
 
 
Segment income
$
11,564

 
$
21,876

 
$
16,309

 
$
33,758

 
$
66,484

 
 
 
 
 
 
 
 
 
 
 
(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)
88.8
%
 
88.0
%
 
87.7
%
 
88.9
 %
 
87.3
%
Depreciation and amortization
4.6
%
 
3.2
%
 
4.3
%
 
4.2
 %
 
3.3
%
Selling and distribution expenses
2.2
%
 
1.9
%
 
2.3
%
 
2.3
 %
 
2.0
%
General and administrative expenses
0.9
%
 
0.7
%
 
0.9
%
 
1.2
 %
 
0.8
%
Other (income) expense, net
0.1
%
 
(0.3
%)
 
0.1
%
 
(0.1
)%
 
(0.1
%)
 
96.6
%
 
93.6
%
 
95.3
%
 
96.6
 %
 
93.3
%
 
 
 
 
 
 
 
 
 
 
Segment income
3.4
%
 
6.4
%
 
4.7
%
 
3.4
 %
 
6.7
 %



6

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

 
Three Months Ended
 
Nine Months Ended
 
September 30
 
June 30
 
September 30
 
2016
 
2015
 
2016
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
Segment sales
$
889,026

 
$
798,982

 
$
850,042

 
$
2,456,322

 
$
2,183,965

 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
781,978

 
702,759

 
743,700

 
2,161,456

 
1,935,623

Depreciation and amortization
3,514

 
3,121

 
3,354

 
10,103

 
8,734

Selling and distribution expenses
72,237

 
66,183

 
68,574

 
201,313

 
181,743

General and administrative expenses
5,451

 
4,421

 
5,356

 
15,310

 
12,660

Other (income) expense, net
(569
)
 
(186
)
 
(59
)
 
(765
)
 
(401
)
 
862,611

 
776,298

 
820,925

 
2,387,417

 
2,138,359

 
 
 
 
 
 
 
 
 
 
Segment income
$
26,415

 
$
22,684

 
$
29,117

 
$
68,905

 
$
45,606

 
 
 
 
 
 
 
 
 
 
 
(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)
88.0
 %
 
88.0
 %
 
87.5
 %
 
88.0
 %
 
88.6
 %
Depreciation and amortization
0.4
 %
 
0.4
 %
 
0.4
 %
 
0.4
 %
 
0.4
 %
Selling and distribution expenses
8.1
 %
 
8.3
 %
 
8.1
 %
 
8.2
 %
 
8.3
 %
General and administrative expenses
0.6
 %
 
0.6
 %
 
0.6
 %
 
0.6
 %
 
0.6
 %
Other (income) expense, net
(0.1
)%
 
—
 %
 
—
 %
 
—
 %
 
—
 %
 
97.0
 %
 
97.2
 %
 
96.6
 %
 
97.2
 %
 
97.9
 %
 
 
 
 
 
 
 
 
 
 
Segment income
3.0
 %
 
2.8
 %
 
3.4
 %
 
2.8
 %
 
2.1
 %



7

Segment Information
(unaudited, in thousands)
 
Three Months Ended
 
Nine Months Ended
 
September 30
 
June 30,
2016
 
September 30
 
2016
 
2015
 
 
2016
 
2015
Segment sales
 
 
 
 
 
 
 
 
 
Wood Products
$
340,928

 
$
340,621

 
$
346,358

 
$
990,743

 
$
989,806

Building Materials Distribution
889,026

 
798,982

 
850,042

 
2,456,322

 
2,183,965

Corporate and Other
74

 
—

 
103

 
363

 
—

Intersegment eliminations
(162,814
)
 
(148,023
)
 
(152,730
)
 
(455,746
)
 
(416,891
)
 
$
1,067,214

 
$
991,580

 
$
1,043,773

 
$
2,991,682

 
$
2,756,880

 
 
 
 
 
 
 
 
 
 
Segment income (loss)
 
 
 
 
 
 
 
 
 
Wood Products
$
11,564

 
$
21,876

 
$
16,309

 
$
33,758

 
$
66,484

Building Materials Distribution
26,415

 
22,684

 
29,117

 
68,905

 
45,606

Corporate and Other
(6,712
)
 
(4,268
)
 
(7,531
)
 
(19,898
)
 
(16,817
)
 
31,267

 
40,292

 
37,895

 
82,765

 
95,273

 
 
 
 
 
 
 
 
 
 
Interest expense
(7,135
)
 
(5,729
)
 
(6,427
)
 
(19,364
)
 
(16,801
)
Interest income
60

 
73

 
27

 
236

 
221

Change in fair value of interest rate swaps
836

 
—

 
(1,532
)
 
(765
)
 
—

Loss on extinguishment of debt
(9,525
)
 
—

 
—

 
(9,525
)
 
—

Income before income taxes
$
15,503

 
$
34,636

 
$
29,963

 
$
53,347

 
$
78,693

 
 
 
 
 
 
 
 
 
 
EBITDA (a)
 
 
 
 
 
 
 
 
 
Wood Products
$
27,189

 
$
32,925

 
$
31,078

 
$
75,786

 
$
98,665

Building Materials Distribution
29,929

 
25,805

 
32,471

 
79,008

 
54,340

Corporate and Other
(6,392
)
 
(4,189
)
 
(7,102
)
 
(18,780
)
 
(16,615
)
 
$
50,726

 
$
54,541

 
$
56,447

 
$
136,014

 
$
136,390


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

8



Boise Cascade Company
Consolidated Balance Sheets
(unaudited, in thousands)
 
September 30,
2016
 
December 31,
2015
 
 
ASSETS
 
 
 
 
 
 
 
Current
 
 
 
Cash and cash equivalents
$
131,184

 
$
184,496

Restricted cash deposits with trustee
122,856

 
—

Receivables
 
 
 
Trade, less allowances of $1,388 and $1,734
263,199

 
187,138

Related parties
439

 
1,065

Other
8,687

 
10,861

Inventories
451,056

 
384,857

Prepaid expenses and other
9,842

 
17,153

Total current assets
987,263

 
785,570

 
 
 
 
Property and equipment, net
557,213

 
402,666

Timber deposits
11,545

 
15,848

Goodwill
55,433

 
21,823

Intangible assets, net
15,720

 
10,090

Other assets
11,631

 
12,609

Total assets
$
1,638,805

 
$
1,248,606



9

Boise Cascade Company
Consolidated Balance Sheets (continued)
(unaudited, in thousands, except per-share data)
 
September 30,
2016
 
December 31,
2015
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
Current
 
 
 
Current portion of long-term debt
$
114,342

 
$
—

Accounts payable
 
 
 
Trade
245,091

 
159,029

Related parties
2,176

 
1,442

Accrued liabilities
 
 
 
Compensation and benefits
62,007

 
54,712

Interest payable
4,998

 
3,389

Other
49,633

 
40,078

Total current liabilities
478,247

 
258,650

 
 
 
 
Debt
 
 
 
Long-term debt, less current portion
467,232

 
344,589

 
 
 
 
Other
 
 
 
Compensation and benefits
93,374

 
93,355

Other long-term liabilities
27,478

 
17,342

 
120,852

 
110,697

 
 
 
 
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, 43,518 and 43,413 shares issued, respectively
435

 
434

Treasury Stock, 4,767 and 4,587 shares at cost, respectively
(126,343
)
 
(123,711
)
Additional paid-in capital
513,212

 
508,066

Accumulated other comprehensive loss
(91,885
)
 
(93,015
)
Retained earnings
277,055

 
242,896

Total stockholders' equity
572,474

 
534,670

Total liabilities and stockholders' equity
$
1,638,805

 
$
1,248,606



10

Boise Cascade Company
Consolidated Statements of Cash Flows
(unaudited, in thousands)
 
Nine Months Ended
 
September 30
 
2016
 
2015
Cash provided by (used for) operations
 
 
 
Net income
$
34,159

 
$
49,854

Items in net income not using (providing) cash
 
 
 
Depreciation and amortization, including deferred financing costs and other
54,609

 
42,314

Stock-based compensation
5,980

 
4,330

Pension expense
1,749

 
2,844

Deferred income taxes
7,008

 
20,722

Change in fair value of interest rate swaps
765

 
—

Other
67

 
(1,853
)
Loss on extinguishment of debt
9,525

 
—

Decrease (increase) in working capital, net of acquisitions
 
 
 
Receivables
(62,794
)
 
(59,381
)
Inventories
(48,362
)
 
(10,154
)
Prepaid expenses and other
(3,678
)
 
(2,241
)
Accounts payable and accrued liabilities
102,313

 
76,485

Pension contributions
(3,338
)
 
(53,701
)
Income taxes payable
13,623

 
13,489

Restricted cash deposits with trustee for interest payments
(3,681
)
 
—

Other
5,309

 
(4,782
)
Net cash provided by operations
113,254

 
77,926

 
 
 
 
Cash provided by (used for) investment
 
 
 
Expenditures for property and equipment
(55,426
)
 
(56,698
)
Acquisitions of businesses and facilities
(215,900
)
 
—

Proceeds from sales of assets and other
546

 
2,959

Net cash used for investment
(270,780
)
 
(53,739
)
 
 
 
 
Cash provided by (used for) financing
 
 
 
Borrowings of long-term debt, including revolving credit facility
835,000

 
50,000

Payments on long-term debt, including revolving credit facility
(602,096
)
 
—

Restricted cash deposits with trustee for debt payments
(119,175
)
 
—

Treasury stock purchased
(2,632
)
 
(23,711
)
Financing costs
(6,319
)
 
(702
)
Tax withholding payments on stock-based awards
(383
)
 
(1,160
)
Other
(181
)
 
621

Net cash provided by financing
104,214

 
25,048

 
 
 
 
Net increase (decrease) in cash and cash equivalents
(53,312
)
 
49,235

 
 
 
 
Balance at beginning of the period
184,496

 
163,549

 
 
 
 
Balance at end of the period
$
131,184

 
$
212,784


11

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 2015 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, interest income, change in fair value of interest rate swaps, and loss on extinguishment of debt), income taxes, and depreciation and amortization. The following table reconciles net income to EBITDA for the three months ended September 30, 2016 and 2015, and June 30, 2016, and the nine months ended September 30, 2016 and 2015:
 
Three Months Ended
 
Nine Months Ended
 
September 30
 
June 30,
2016
 
September 30
 
2016
 
2015
 
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
(unaudited, in thousands)
 
 
 
 
 
 
 
 
 
 
Net income
$
9,981

 
$
22,007

 
$
19,228

 
$
34,159

 
$
49,854

Interest expense
7,135

 
5,729

 
6,427

 
19,364

 
16,801

Interest income
(60
)
 
(73
)
 
(27
)
 
(236
)
 
(221
)
Change in fair value of interest rate swaps
(836
)
 
—

 
1,532

 
765

 
—

Loss on extinguishment of debt
9,525

 
—

 
—

 
9,525

 
—

Income tax provision
5,522

 
12,629

 
10,735

 
19,188

 
28,839

Depreciation and amortization
19,459

 
14,249

 
18,552

 
53,249

 
41,117

EBITDA
$
50,726

 
$
54,541

 
$
56,447

 
$
136,014

 
$
136,390



12

The following table reconciles segment income (loss) to EBITDA for the three months ended September 30, 2016 and 2015, and June 30, 2016, and the nine months ended September 30, 2016 and 2015:
 
Three Months Ended
 
Nine Months Ended
 
September 30
 
June 30,
2016
 
September 30
 
2016
 
2015
 
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
(unaudited, in thousands)
Wood Products
 
 
 
 
 
 
 
 
 
Segment income
$
11,564

 
$
21,876

 
$
16,309

 
$
33,758

 
$
66,484

Depreciation and amortization
15,625

 
11,049

 
14,769

 
42,028

 
32,181

EBITDA
27,189

 
32,925

 
31,078

 
75,786

 
98,665

 
 
 
 
 
 
 
 
 
 
Building Materials Distribution
 
 
 
 
 
 
 
 
 
Segment income
26,415

 
22,684

 
29,117

 
68,905

 
45,606

Depreciation and amortization
3,514

 
3,121

 
3,354

 
10,103

 
8,734

EBITDA
29,929

 
25,805

 
32,471

 
79,008

 
54,340

 
 
 
 
 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
 
 
 
 
Segment loss
(6,712
)
 
(4,268
)
 
(7,531
)
 
(19,898
)
 
(16,817
)
Depreciation and amortization
320

 
79

 
429

 
1,118

 
202

EBITDA
(6,392
)
 
(4,189
)
 
(7,102
)
 
(18,780
)
 
(16,615
)
 
 
 
 
 
 
 
 
 
 
Total Company EBITDA
$
50,726

 
$
54,541

 
$
56,447

 
$
136,014

 
$
136,390


13


Exhibit 99.2
Boise Cascade Company
Quarterly Statistical Information

Wood Products Segment
 
 
 
 
 
 
2016
 
Q1
Q2
Q3
Q4
YTD
 LVL sales volume (MCF)
3,566

4,626

4,421

 
12,613

 I-joist sales volume (MELF)
50,172

64,765

61,602

 
176,539

 Plywood sales volume (MSF 3/8")
379,631

377,934

385,398

 
1,142,963

 Lumber sales volume (MBF)
47,919

49,398

45,925

 
143,242

 LVL mill net sales price ($/CF)
$
16.74

$
16.79

$
16.57

 
$
16.70

 I-joist mill net sales price ($/MELF)
$
1,138

$
1,136

$
1,102

 
$
1,125

 Plywood net sales price ($/MSF 3/8")
$
261

$
271

$
288

 
$
273

 Lumber net sales price ($/MBF)
$
451

$
464

$
481

 
$
465

 Segment sales (000)
$
303,457

$
346,358

$
340,928

 
$
990,743

 Segment income (000)
$
5,885

$
16,309

$
11,564

 
$
33,758

 Segment depreciation and amortization (000)
$
11,634

$
14,769

$
15,625

 
$
42,028

 Segment EBITDA (000)1
$
17,519

$
31,078

$
27,189

 
$
75,786

 EBITDA as a percentage of sales
5.8
%
9.0
%
8.0
%
 
7.6
%
 Capital spending (000)2
$
11,870

$
15,862

$
15,275

 
$
43,007

 Receivables (000)
$
111,008

$
78,174

$
70,233

 
 
 Inventories (000)
$
175,842

$
190,692

$
186,563

 
 
 Accounts payable (000)
$
44,686

$
53,806

$
53,275

 
 
 
 
 
 
 
 
 
2015
 
Q1
Q2
Q3
Q4
YTD
 LVL sales volume (MCF)
2,840

3,485

3,785

2,955

13,065

 I-joist sales volume (MELF)
40,810

56,572

57,121

46,319

200,822

 Plywood sales volume (MSF 3/8")
412,139

410,491

412,369

399,577

1,634,576

 Lumber sales volume (MBF)
48,100

55,945

54,354

47,289

205,688

 LVL mill net sales price ($/CF)
$
16.48

$
16.46

$
16.53

$
16.28

$
16.44

 I-joist mill net sales price ($/MELF)
$
1,098

$
1,098

$
1,118

$
1,112

$
1,107

 Plywood net sales price ($/MSF 3/8")
$
312

$
302

$
282

$
268

$
291

 Lumber net sales price ($/MBF)
$
510

$
484

$
477

$
456

$
482

 Segment sales (000)
$
309,316

$
339,869

$
340,621

$
292,307

$
1,282,113

 Segment income (loss) (000)
$
20,896

$
23,712

$
21,876

$
(2,263
)
$
64,221

 Segment depreciation and amortization (000)
$
10,791

$
10,341

$
11,049

$
11,091

$
43,272

 Segment EBITDA (000)1
$
31,687

$
34,053

$
32,925

$
8,828

$
107,493

 EBITDA as a percentage of sales
10.2
%
10.0
%
9.7
%
3.0
%
8.4
%
 Capital spending (000)
$
9,532

$
13,957

$
20,119

$
25,149

$
68,757

 Receivables (000)
$
69,406

$
73,243

$
72,626

$
47,639

 
 Inventories (000)
$
161,586

$
151,000

$
160,134

$
163,961

 
 Accounts payable (000)
$
47,762

$
53,800

$
56,336

$
40,868

 



1



Boise Cascade Company
Quarterly Statistical Information (continued)

Wood Products Segment (continued)
 
 
 
 
 
 
2014
 
Q1
Q2
Q3
Q4
YTD
 LVL sales volume (MCF)
2,642

3,434

3,602

2,677

12,355

 I-joist sales volume (MELF)
39,839

56,813

56,403

39,587

192,642

 Plywood sales volume (MSF 3/8")
414,443

430,404

396,339

409,952

1,651,138

 Lumber sales volume (MBF)
45,883

56,799

57,261

51,690

211,633

 LVL mill net sales price ($/CF)
$
16.00

$
16.28

$
16.59

$
16.34

$
16.32

 I-joist mill net sales price ($/MELF)
$
1,016

$
1,068

$
1,095

$
1,091

$
1,070

 Plywood net sales price ($/MSF 3/8")
$
294

$
301

$
335

$
330

$
314

 Lumber net sales price ($/MBF)
$
569

$
574

$
546

$
544

$
558

 Segment sales (000)
$
293,274

$
351,011

$
355,697

$
317,019

$
1,317,001

 Segment income (000)
$
13,047

$
31,213

$
40,631

$
23,483

$
108,374

 Segment depreciation and amortization (000)
$
9,980

$
10,044

$
10,711

$
10,722

$
41,457

 Segment EBITDA (000)1
$
23,027

$
41,257

$
51,342

$
34,205

$
149,831

 EBITDA as a percentage of sales
7.9
%
11.8
%
14.4
%
10.8
%
11.4
%
 Capital spending (000)
$
9,714

$
5,659

$
11,541

$
13,377

$
40,291

 Receivables (000)
$
62,203

$
70,288

$
66,882

$
53,726

 
 Inventories (000)
$
154,412

$
149,388

$
158,324

$
162,395

 
 Accounts payable (000)
$
45,719

$
55,365

$
55,581

$
42,721

 
 
 
 
 
 
 
1Segment EBITDA is calculated as segment income (loss) before depreciation and amortization.
2 Capital spending in second quarter 2016 and first quarter 2016 excludes $0.3 million and $215.6 million, respectively, of cash paid for the acquisition of businesses and facilities.



2



Boise Cascade Company
Quarterly Statistical Information (continued)

Building Materials Distribution Segment
 
 
 
 
 
2016
 
Q1
Q2
Q3
Q4
YTD
 Commodity sales
47.2
%
45.5
%
46.9
%
 
46.5
%
 General line sales
34.4
%
36.5
%
35.1
%
 
35.4
%
 EWP sales
18.4
%
18.0
%
18.0
%
 
18.1
%
 Total sales (000)
$
717,254

$
850,042

$
889,026

 
$
2,456,322

 Gross margin1
11.4
%
12.5
%
12.0
%
 
12.0
%
 Segment income (000)
$
13,373

$
29,117

$
26,415

 
$
68,905

 Segment depreciation and amortization (000)
$
3,235

$
3,354

$
3,514

 
$
10,103

 Segment EBITDA (000)2
$
16,608

$
32,471

$
29,929

 
$
79,008

 EBITDA as a percentage of sales
2.3
%
3.8
%
3.4
%
 
3.2
%
 Capital spending (000)
$
2,896

$
3,599

$
4,933

 
$
11,428

 Receivables (000)
$
229,673

$
236,954

$
227,206

 
 
 Inventories (000)
$
264,721

$
271,306

$
264,493

 
 
 Accounts payable (000)
$
248,170

$
217,149

$
210,892

 
 
 
 
 
 
 
 
 
2015
 
Q1
Q2
Q3
Q4
YTD
 Commodity sales
48.4
%
45.2
%
45.5
%
47.3
%
46.5
%
 General line sales
34.7
%
37.0
%
36.4
%
35.2
%
35.9
%
 EWP sales
16.9
%
17.8
%
18.1
%
17.5
%
17.6
%
 Total sales (000)
$
622,905

$
762,078

$
798,982

$
707,337

$
2,891,302

 Gross margin1
10.4
%
11.5
%
12.0
%
12.2
%
11.6
%
 Segment income (000)
$
3,346

$
19,576

$
22,684

$
15,145

$
60,751

 Segment depreciation and amortization (000)
$
2,739

$
2,874

$
3,121

$
3,203

$
11,937

 Segment EBITDA (000)2
$
6,085

$
22,450

$
25,805

$
18,348

$
72,688

 EBITDA as a percentage of sales
1.0
%
2.9
%
3.2
%
2.6
%
2.5
%
 Capital spending (000)
$
2,963

$
4,023

$
3,928

$
3,595

$
14,509

 Receivables (000)
$
174,582

$
195,587

$
192,336

$
165,649

 
 Inventories (000)
$
270,881

$
264,114

$
244,481

$
220,896

 
 Accounts payable (000)
$
179,530

$
209,090

$
181,586

$
130,190

 


3


Boise Cascade Company
Quarterly Statistical Information (continued)

Building Materials Distribution Segment (continued)
 
 
 
 
2014
 
Q1
Q2
Q3
Q4
YTD
 Commodity sales
52.2
%
48.7
%
47.7
%
49.6
%
49.4
%
 General line sales
31.9
%
33.7
%
34.8
%
33.7
%
33.6
%
 EWP sales
15.9
%
17.6
%
17.5
%
16.6
%
17.0
%
 Total sales (000)
$
585,530

$
758,375

$
773,391

$
669,367

$
2,786,663

 Gross margin1
10.6
%
11.3
%
12.0
%
11.2
%
11.4
%
 Segment income (000)
$
5,861

$
19,401

$
21,058

$
10,359

$
56,679

 Segment depreciation and amortization (000)
$
2,307

$
2,394

$
2,448

$
2,653

$
9,802

 Segment EBITDA (000)2
$
8,168

$
21,795

$
23,506

$
13,012

$
66,481

 EBITDA as a percentage of sales
1.4
%
2.9
%
3.0
%
1.9
%
2.4
%
 Capital spending (000)
$
2,720

$
3,551

$
7,161

$
6,917

$
20,349

 Receivables (000)
$
163,820

$
181,390

$
176,920

$
142,891

 
 Inventories (000)
$
266,647

$
261,176

$
240,547

$
232,066

 
 Accounts payable (000)
$
167,152

$
174,402

$
149,548

$
119,054

 
 
 
 
 
 
 
1We define gross margin as "Sales" less "Materials, labor, and other operating expenses (excluding depreciation)." Substantially all costs included in "Materials, labor, and other operating expenses (excluding depreciation)" for our Building Materials Distribution segment are for inventory purchased for resale. Gross margin percentage is gross margin as a percentage of segment sales.
2Segment EBITDA is calculated as segment income before depreciation and amortization.



4



Boise Cascade Company
Quarterly Statistical Information (continued)
Reconciliation of Non-GAAP Financial Measures
(000)

Total Boise Cascade Company
 
 
 
 
 
 
 
 
 
 
EBITDA represents income before interest (interest expense, interest income, change in fair value of interest rate swaps, and loss on extinguishment of debt), income taxes, depreciation and amortization. The following tables reconcile net income to EBITDA for the periods noted below:
 
2016
 
Q1
Q2
Q3
Q4
YTD
 
 
 
 
 
 
Net income
$
4,950

$
19,228

$
9,981

 
$
34,159

Interest expense
5,802

6,427

7,135

 
19,364

Interest income
(149
)
(27
)
(60
)
 
(236
)
Change in fair value of interest rate swaps
69

1,532

(836
)
 
765

Loss on extinguishment of debt
—

—

9,525

 
9,525

Income tax provision
2,931

10,735

5,522

 
19,188

Depreciation and amortization
15,238

18,552

19,459

 
53,249

EBITDA
$
28,841

$
56,447

$
50,726



$
136,014

 
 
 
 
 
 
 
2015
 
Q1
Q2
Q3
Q4
YTD
 
 
 
 
 
 
Net income
$
7,617

$
20,230

$
22,007

$
2,328

$
52,182

Interest expense
5,481

5,591

5,729

5,731

22,532

Interest income
(90
)
(58
)
(73
)
(102
)
(323
)
Income tax provision (benefit)
4,573

11,637

12,629

(339
)
28,500

Depreciation and amortization
13,587

13,281

14,249

14,461

55,578

EBITDA
$
31,168

$
50,681

$
54,541

$
22,079

$
158,469

 
 
 
 
 
 
 
2014
 
Q1
Q2
Q3
Q4
YTD
 
 
 
 
 
 
Net income
$
5,565

$
26,418

$
32,285

$
15,741

$
80,009

Interest expense
5,512

5,519

5,514

5,504

22,049

Interest income
(70
)
(53
)
(57
)
(57
)
(237
)
Income tax provision
3,461

14,286

18,133

7,416

43,296

Depreciation and amortization
12,320

12,482

13,203

13,434

51,439

EBITDA
$
26,788

$
58,652

$
69,078

$
42,038

$
196,556



5

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