EX-99.1 2 bccexhibit9919302024.htm EARNINGS RELEASE Document

Boise Cascade CompanyExhibit 99.1
1111 West Jefferson Street, Suite 300
Boise, ID 83702
News Release
bcclogoa02a05.jpg

Investor Relations Contact - Chris Forrey
investor@bc.com
Media Contact - Amy Evans
mediarelations@bc.com

For Immediate Release: November 4, 2024

Boise Cascade Company Reports Third Quarter 2024 Results

BOISE, Idaho - Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported net income of $91.0 million, or $2.33 per share, on sales of $1.7 billion for the third quarter ended September 30, 2024, compared with net income of $143.1 million, or $3.58 per share, on sales of $1.8 billion for the third quarter ended September 30, 2023.

"In what has proven to be a moderate demand environment, once again, we were able to deliver good financial results in the third quarter. We could not have done this without the tremendous efforts of our associates and our unique combination of best-in-class engineered wood products and an unmatched nationwide wholesale distribution network,” stated Nate Jorgensen, CEO. “In addition, we continue to progress on our key strategic investment initiatives and thoughtfully deploy capital to shareholders. Looking forward, we expect normal seasonality through the winter months, and are well positioned to serve and support our customer and vendor partners as changes in demand dictate."

Third Quarter 2024 Highlights
3Q 20243Q 2023% change
(in thousands, except per-share data and percentages)
Consolidated Results
Sales$1,713,724 $1,834,441 (7)%
Net income91,038 143,068 (36)%
Net income per common share - diluted2.33 3.58 (35)%
Adjusted EBITDA 1
154,480 216,465 (29)%
Segment Results
Wood Products sales$453,896 $515,225 (12)%
Wood Products income53,853 99,574 (46)%
Wood Products EBITDA 1
77,404 122,924 (37)%
Building Materials Distribution sales1,567,466 1,670,296 (6)%
Building Materials Distribution income74,821 97,076 (23)%
Building Materials Distribution EBITDA 1
87,749 104,857 (16)%
1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.



In third quarter 2024, total U.S. housing starts and single-family housing starts decreased 3% and 1%, respectively, compared to the same period in 2023. On a year-to-date basis through September 2024, total housing starts decreased 3%, while single-family housing starts increased 10%, compared to the same period in 2023. Single-family housing starts are the key demand driver for our sales.

Wood Products

Wood Products' sales, including sales to Building Materials Distribution (BMD), decreased $61.3 million, or 12%, to $453.9 million for the three months ended September 30, 2024, from $515.2 million for the three months ended September 30, 2023. The decrease in sales was driven by lower plywood sales prices, as well as lower sales prices for LVL and I-joists (collectively referred to as EWP). In addition, lower sales volumes for I-joists decreased sales, while sales volumes for LVL and plywood were flat. Other sales related to lumber and residual byproducts also decreased.

Comparative average net selling prices and sales volume changes for EWP and plywood are as follows:
    
3Q 2024 vs. 3Q 20233Q 2024 vs. 2Q 2024
 Average Net Selling Prices
    LVL(5)%(2)%
    I-joists(6)%(2)%
    Plywood(13)%(8)%
 Sales Volumes
    LVL—%(2)%
    I-joists(8)%(10)%
    Plywood—%2%

Wood Products' segment income decreased $45.7 million to $53.9 million for the three months ended September 30, 2024, from $99.6 million for the three months ended September 30, 2023. The decrease in segment income was due primarily to lower EWP and plywood sales prices, as well as higher conversion costs. In addition, lower I-joist sales volumes contributed to the decrease in segment income.    

Building Materials Distribution

BMD's sales decreased $102.8 million, or 6%, to $1,567.5 million for the three months ended September 30, 2024, from $1,670.3 million for the three months ended September 30, 2023. Compared with the same quarter in the prior year, the overall decrease in sales was driven by a sales price decrease of 6%, as sales volumes were flat. Excluding the impact of the BROSCO acquisition on October 2, 2023, sales would have decreased by 9%. By product line, commodity sales decreased 12%, general line product sales increased 4%, and EWP sales (substantially all of which are sourced through our Wood Products segment) decreased 14%.

BMD segment income decreased $22.3 million to $74.8 million for the three months ended September 30, 2024, from $97.1 million for the three months ended September 30, 2023. The decrease in segment income was driven by increased selling and distribution expenses and depreciation and amortization expense of $10.0 million and $5.1 million, respectively. In addition, gross margin decreased $7.7 million, driven by lower margins on commodity products and EWP, offset partially by improved margins on general line products.

Balance Sheet and Liquidity

Boise Cascade ended third quarter 2024 with $761.6 million of cash and cash equivalents and $395.7 million of undrawn committed bank line availability, for total available liquidity of $1,157.3 million. The Company had $450.0 million of outstanding debt at September 30, 2024.

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Capital Allocation

We expect capital expenditures in 2024, excluding potential acquisition spending, to total approximately $220 million to $240 million. In addition, we expect capital expenditures in 2025 to total approximately $200 million to $220 million. These levels of capital expenditures could increase or decrease as a result of several factors, including acquisitions, efforts to further accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, availability of engineering and construction resources, and timing and availability of equipment purchases.
    
For the nine months ended September 30, 2024, the Company paid $220.5 million in common stock dividends. On October 30, 2024, our board of directors declared a quarterly dividend of $0.21 per share on our common stock, payable on December 18, 2024, to stockholders of record on December 2, 2024.

For the three and nine months ended September 30, 2024, the Company paid $69.7 million and $158.5 million, respectively, for the repurchase of 554,500 and 1,232,345 shares of our common stock, respectively. Furthermore, in October 2024, the Company repurchased an additional 50,000 shares of our common stock at a cost of $6.9 million. On October 30, 2024, our board of directors authorized the repurchase of an additional 1.4 million shares of our common stock. This increase is in addition to the remaining authorized shares under our prior common stock repurchase program. As of October 31, 2024, approximately 2 million shares were available for repurchase under our existing share repurchase program.

Outlook

Demand for the products we manufacture, as well as the products we purchase and distribute, is correlated with new residential construction, residential repair-and-remodeling activity, and light commercial construction. Residential construction, particularly new single-family construction, is the key demand driver for the products we manufacture and distribute. As reported by the U.S. Census Bureau, housing starts were 1.42 million in 2023. Current industry forecasts for U.S. housing starts are approximately 1.35 million in 2024 followed by 2025 starts at or modestly above 1.40 million. For the nine months ended September 2024, single-family starts are outpacing 2023 levels by 10% whereas multi-family starts have declined sharply from historic levels due to increased capital costs for developers, combined with historic levels of multi-family unit completions in 2024. Home affordability remains a challenge for many consumers due to home prices and the cost of financing, with the level of mortgage rates also limiting the supply of existing housing stock available for sale. Large homebuilders are addressing affordability challenges by reducing home sizes and plan complexity, as well as offering mortgage rate buydowns. New residential construction will continue to be an important source of supply for the demand created by undersupplied housing, favorable demographic trends, and low unemployment. We expect 2025 to reflect modest growth in home improvement spending, as the age of U.S. housing stock and elevated levels of homeowner equity will continue to provide a favorable backdrop for repair-and-remodel spending. Ultimately, macroeconomic factors, the level and expectations for mortgage rates, home affordability, home equity levels, home size, and other factors will influence the near-term demand environment for the products we manufacture and distribute.

As a manufacturer of certain commodity products, we have sales and profitability exposure to declines in commodity product prices and rising input costs. Our distribution business purchases and resells a broad mix of products with periods of increasing prices providing the opportunity for higher sales and increased margins, while declining price environments expose us to declines in sales and profitability. Future product pricing, particularly commodity products pricing and input costs, may be volatile in response to economic uncertainties, industry operating rates, supply-related disruptions, transportation constraints or disruptions, net import and export activity, inventory levels in various 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 the Company's website at www.bc.com.

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Webcast and Conference Call

Boise Cascade will host a webcast and conference call to discuss third quarter earnings on Tuesday, November 5, 2024, at 10 a.m. Eastern.

To join the webcast, go to the Investors section of our website at www.bc.com/investors and select the Event Calendar link. Analysts and investors who wish to ask questions during the Q&A session can register for the call here.

The archived webcast will be available in the Investors section of Boise Cascade's website.

Use of Non-GAAP Financial Measures
    
We refer to the terms EBITDA and Adjusted EBITDA in this earnings release and the accompanying Quarterly Statistical Information as supplemental measures of our performance and liquidity that are 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 and interest income), income taxes, and depreciation and amortization. Additionally, we disclose Adjusted EBITDA, which further adjusts EBITDA to exclude the change in fair value of interest rate swaps.

We believe EBITDA and Adjusted EBITDA are meaningful measures because they present a transparent view of our recurring operating performance and allow management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. We also believe EBITDA and Adjusted EBITDA are useful to investors because they provide 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 they are 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. EBITDA and Adjusted EBITDA, however, are not measures of our liquidity or financial performance under GAAP and should not be considered as alternatives to net income, income from operations, or any other performance measure derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. The use of EBITDA and Adjusted EBITDA instead of net income or segment income have limitations as analytical tools, 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 measures of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.
    
Forward-Looking Statements

This press release includes statements about our expectations of future operational and financial performance that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements regarding our outlook. Statements preceded or followed by, or that otherwise include, the words "believes," "expects," "anticipates," "intends," "project," "estimates," "plans," "forecast," "is likely to," and similar expressions or future or conditional verbs such as "will," "may," "would," "should," and "could" are generally forward-looking in nature and not historical facts. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. 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, changes in the competitive position of our products, commodity input costs, the effect of general economic conditions, our ability to efficiently and effectively integrate the BROSCO acquisition, 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 press release. 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 release.

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Boise Cascade Company
Consolidated Statements of Operations
(in thousands, except per-share data) (unaudited)
Three Months EndedNine Months Ended
September 30June 30, 2024September 30
2024202320242023
Sales$1,713,724 $1,834,441 $1,797,670 $5,156,814 $5,193,989 
Costs and expenses 
Materials, labor, and other operating expenses (excluding depreciation)1,375,719 1,442,178 1,440,680 4,123,838 4,099,249 
Depreciation and amortization36,861 31,474 34,367 107,078 93,382 
Selling and distribution expenses157,522 147,714 149,783 451,415 415,707 
General and administrative expenses26,172 27,583 25,943 77,232 84,193 
Other (income) expense, net94 (141)(84)(68)(1,752)
1,596,368 1,648,808 1,650,689 4,759,495 4,690,779 
Income from operations117,356 185,633 146,981 397,319 503,210 
Foreign currency exchange gain (loss)300 (602)(104)(103)(355)
Pension expense (excluding service costs)(37)(40)(37)(111)(122)
Interest expense(6,082)(6,351)(6,105)(18,257)(19,051)
Interest income10,168 13,760 10,543 31,308 34,964 
Change in fair value of interest rate swaps(866)(327)(487)(1,573)(798)
3,483 6,440 3,810 11,264 14,638 
Income before income taxes120,839 192,073 150,791 408,583 517,848 
Income tax provision(29,801)(49,005)(38,499)(101,129)(131,727)
Net income$91,038 $143,068 $112,292 $307,454 $386,121 
Weighted average common shares outstanding:
  Basic38,848 39,675 39,412 39,286 39,648 
  Diluted39,063 39,983 39,608 39,521 39,849 
Net income per common share:
  Basic$2.34 $3.61 $2.85 $7.83 $9.74 
  Diluted$2.33 $3.58 $2.84 $7.78 $9.69 
Dividends declared per common share$5.21 $0.20 $0.20 $5.61 $3.50 


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Wood Products Segment
Statements of Operations
(in thousands, except percentages) (unaudited)
Three Months EndedNine Months Ended
September 30June 30, 2024September 30
2024202320242023
Segment sales$453,896 $515,225 $489,823 $1,412,647 $1,482,926 
Costs and expenses    
Materials, labor, and other operating expenses (excluding depreciation)361,313 376,754 378,920 1,097,954 1,091,900 
Depreciation and amortization23,551 23,350 22,270 70,205 70,145 
Selling and distribution expenses10,587 10,786 11,114 32,252 33,901 
General and administrative expenses4,640 5,018 4,606 14,266 15,560 
Other (income) expense, net(48)(257)133 99 (1,584)
400,043 415,651 417,043 1,214,776 1,209,922 
Segment income$53,853 $99,574 $72,780 $197,871 $273,004 
(percentage of sales)
Segment sales100.0  %100.0  %100.0 %100.0 %100.0 %
Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)79.6 %73.1 %77.4 %77.7 %73.6 %
Depreciation and amortization5.2 %4.5 %4.5 %5.0 %4.7 %
Selling and distribution expenses2.3 %2.1 %2.3 %2.3 %2.3 %
General and administrative expenses1.0 %1.0 %0.9 %1.0 %1.0 %
Other (income) expense, net— %— %— %— %(0.1 %)
88.1 %80.7 %85.1 %86.0 %81.6 %
Segment income11.9 %19.3 %14.9 %14.0 %18.4 %

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Building Materials Distribution Segment
Statements of Operations
(in thousands, except percentages) (unaudited)
Three Months EndedNine Months Ended
September 30June 30, 2024September 30
2024202320242023
Segment sales$1,567,466 $1,670,296 $1,655,221 $4,727,708 $4,686,076 
Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)1,322,001 1,417,153 1,409,510 4,009,932 3,983,718 
Depreciation and amortization12,928 7,781 11,741 35,776 22,237 
Selling and distribution expenses146,994 136,982 138,716 419,324 381,878 
General and administrative expenses10,580 11,195 10,070 30,184 33,314 
Other (income) expense, net142 109 (216)(192)(382)
1,492,645 1,573,220 1,569,821 4,495,024 4,420,765 
Segment income $74,821 $97,076 $85,400 $232,684 $265,311 
(percentage of sales)
Segment sales100.0 %100.0 %100.0 %100.0 %100.0 %
Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)84.3 %84.8 %85.2 %84.8 %85.0 %
Depreciation and amortization0.8 %0.5 %0.7 %0.8 %0.5 %
Selling and distribution expenses9.4 %8.2 %8.4 %8.9 %8.1 %
General and administrative expenses0.7 %0.7 %0.6 %0.6 %0.7 %
Other (income) expense, net— %— %— %— %— %
95.2 %94.2 %94.8 %95.1 %94.3 %
Segment income 4.8 %5.8 %5.2 %4.9 %5.7 %

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Segment Information
(in thousands) (unaudited)
Three Months EndedNine Months Ended
September 30June 30, 2024September 30
2024202320242023
Segment sales
Wood Products$453,896 $515,225 $489,823 $1,412,647 $1,482,926 
Building Materials Distribution1,567,466 1,670,296 1,655,221 4,727,708 4,686,076 
Intersegment eliminations(307,638)(351,080)(347,374)(983,541)(975,013)
Total net sales$1,713,724 $1,834,441 $1,797,670 $5,156,814 $5,193,989 
Segment income
Wood Products$53,853 $99,574 $72,780 $197,871 $273,004 
Building Materials Distribution74,821 97,076 85,400 232,684 265,311 
Total segment income128,674 196,650 158,180 430,555 538,315 
Unallocated corporate costs(11,318)(11,017)(11,199)(33,236)(35,105)
Income from operations$117,356 $185,633 $146,981 $397,319 $503,210 
Segment EBITDA
Wood Products$77,404 $122,924 $95,050 $268,076 $343,149 
Building Materials Distribution87,749 104,857 97,141 268,460 287,548 

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


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Boise Cascade Company
Consolidated Balance Sheets
(in thousands) (unaudited)
September 30, 2024December 31, 2023
ASSETS
Current
Cash and cash equivalents$761,599 $949,574 
Receivables 
Trade, less allowances of $4,979 and $3,278
408,487 352,780 
Related parties289 181 
Other17,411 20,740 
Inventories792,356 712,369 
Prepaid expenses and other32,024 21,170 
Total current assets2,012,166 2,056,814 
 
Property and equipment, net985,808 932,633 
Operating lease right-of-use assets50,039 62,868 
Finance lease right-of-use assets22,925 24,003 
Timber deposits9,078 7,208 
Goodwill171,945 170,254 
Intangible assets, net177,028 190,743 
Deferred income taxes4,605 4,854 
Other assets8,033 9,269 
Total assets$3,441,627 $3,458,646 

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Boise Cascade Company
Consolidated Balance Sheets (continued)
(in thousands, except per-share data) (unaudited)
September 30, 2024December 31, 2023
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable
Trade$372,199 $310,175 
Related parties2,216 1,501 
Accrued liabilities 
Compensation and benefits122,000 149,561 
Interest payable5,086 9,958 
Other141,741 122,921 
Total current liabilities643,242 594,116 
Debt 
Long-term debt445,945 445,280 
Other 
Compensation and benefits42,864 40,189 
Operating lease liabilities, net of current portion43,550 56,425 
Finance lease liabilities, net of current portion27,492 28,084 
Deferred income taxes96,967 82,014 
Other long-term liabilities18,134 16,874 
229,007 223,586 
 
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, 45,130 and 44,983 shares issued, respectively
451 450 
Treasury stock, 6,675 and 5,443 shares at cost, respectively
(305,227)(145,335)
Additional paid-in capital
561,223 560,697 
Accumulated other comprehensive loss
(495)(517)
Retained earnings1,867,481 1,780,369 
Total stockholders' equity2,123,433 2,195,664 
Total liabilities and stockholders' equity$3,441,627 $3,458,646 

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Boise Cascade Company
Consolidated Statements of Cash Flows
(in thousands) (unaudited)
Nine Months Ended September 30
20242023
Cash provided by (used for) operations
Net income$307,454 $386,121 
Items in net income not using (providing) cash 
Depreciation and amortization, including deferred financing costs and other
109,531 95,516 
Stock-based compensation11,668 11,518 
Pension expense111 122 
Deferred income taxes15,096 4,351 
Change in fair value of interest rate swaps1,573 798 
Other322 (1,877)
Decrease (increase) in working capital, net of acquisitions 
Receivables(51,192)(158,756)
Inventories(80,739)14,145 
Prepaid expenses and other(6,697)(6,604)
Accounts payable and accrued liabilities44,547 152,303 
Income taxes payable(3,970)23,664 
Other(3,952)(172)
Net cash provided by operations343,752 521,129 
Cash provided by (used for) investment
Expenditures for property and equipment(135,760)(99,251)
Acquisitions of businesses and facilities(5,581)— 
Proceeds from sales of assets and other1,197 2,450 
Net cash used for investment(140,144)(96,801)
Cash provided by (used for) financing
Treasury stock purchased(158,509)(1,539)
Dividends paid on common stock(220,485)(140,885)
Tax withholding payments on stock-based awards(11,141)(5,926)
Other(1,448)(1,359)
Net cash used for financing(391,583)(149,709)
Net increase (decrease) in cash and cash equivalents(187,975)274,619 
Balance at beginning of the period949,574 998,344 
Balance at end of the period$761,599 $1,272,963 
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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 presented herein do not include the notes accompanying the Company's Consolidated Financial Statements and should be read in conjunction with the Company’s 2023 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.
EBITDA represents income before interest (interest expense and interest income), income taxes, and depreciation and amortization. Additionally, we disclose Adjusted EBITDA, which further adjusts EBITDA to exclude the change in fair value of interest rate swaps. The following table reconciles net income to EBITDA and Adjusted EBITDA for the (i) three months ended September 30, 2024 and 2023, (ii) three months ended June 30, 2024, and (iii) nine months ended September 30, 2024 and 2023:
Three Months EndedNine Months Ended
September 30June 30, 2024September 30
2024202320242023
(in thousands)
Net income$91,038 $143,068 $112,292 $307,454 $386,121 
Interest expense6,082 6,351 6,105 18,257 19,051 
Interest income(10,168)(13,760)(10,543)(31,308)(34,964)
Income tax provision29,801 49,005 38,499 101,129 131,727 
Depreciation and amortization36,861 31,474 34,367 107,078 93,382 
EBITDA153,614 216,138 180,720 502,610 595,317 
Change in fair value of interest rate swaps866 327 487 1,573 798 
Adjusted EBITDA$154,480 $216,465 $181,207 $504,183 $596,115 
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The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the (i) three months ended September 30, 2024 and 2023, (ii) three months ended June 30, 2024, and (iii) nine months ended September 30, 2024 and 2023:
Three Months EndedNine Months Ended
September 30June 30, 2024September 30
2024202320242023
(in thousands)
Wood Products
Segment income$53,853 $99,574 $72,780 $197,871 $273,004 
Depreciation and amortization23,551 23,350 22,270 70,205 70,145 
EBITDA$77,404 $122,924 $95,050 $268,076 $343,149 
Building Materials Distribution
Segment income$74,821 $97,076 $85,400 $232,684 $265,311 
Depreciation and amortization12,928 7,781 11,741 35,776 22,237 
EBITDA$87,749 $104,857 $97,141 $268,460 $287,548 
Corporate
Unallocated corporate costs$(11,318)$(11,017)$(11,199)$(33,236)$(35,105)
Foreign currency exchange gain (loss)300 (602)(104)(103)(355)
Pension expense (excluding service costs)(37)(40)(37)(111)(122)
Change in fair value of interest rate swaps(866)(327)(487)(1,573)(798)
Depreciation and amortization382 343 356 1,097 1,000 
EBITDA(11,539)(11,643)(11,471)(33,926)(35,380)
Change in fair value of interest rate swaps866 327 487 1,573 798 
Corporate adjusted EBITDA$(10,673)$(11,316)$(10,984)$(32,353)$(34,582)
Total Company adjusted EBITDA$154,480 $216,465 $181,207 $504,183 $596,115 




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