Boise Cascade Company ("Boise Cascade," the "Company," "we," or
"our") (NYSE: BCC) today reported net income of $104.1 million, or
$2.61 per share, on sales of $1.6 billion for the first quarter
ended March 31, 2024, compared with net income of $96.7 million, or
$2.43 per share, on sales of $1.5 billion for the first quarter
ended March 31, 2023.
"I am pleased with the strong financial results that our team
delivered during the first quarter. As expected, it was a period
influenced by seasonal factors and the relative strength of new
single-family starts," stated Nate Jorgensen, CEO. "As we enter the
second quarter, economic and geopolitical uncertainties are
prevalent, and the extent of the potential impact on the broader
economy and residential construction activity is unknown. Despite
the near-term environment, an undersupply of single-family homes
remains, and I have great confidence in our team as we stay focused
on the effective deployment of our outstanding balance sheet in
support of our stakeholders."
First Quarter 2024 Highlights
1Q 2024
1Q 2023
% change
(in thousands, except per-share
data and percentages)
Consolidated Results
Sales
$
1,645,420
$
1,544,329
7
%
Net income
104,124
96,733
8
%
Net income per common share - diluted
2.61
2.43
7
%
Adjusted EBITDA 1
168,496
158,674
6
%
Segment Results
Wood Products sales
$
468,928
$
437,428
7
%
Wood Products income
71,238
69,395
3
%
Wood Products EBITDA 1
95,622
93,185
3
%
Building Materials Distribution sales
1,505,021
1,379,242
9
%
Building Materials Distribution income
72,463
69,685
4
%
Building Materials Distribution EBITDA
1
83,570
76,755
9
%
1 For reconciliations of non-GAAP
measures, see summary notes at the end of this press release.
In first quarter 2024, total U.S. housing starts and
single-family housing starts increased 1% and 27%, respectively,
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), increased $31.5 million, or 7%, to $468.9
million for the three months ended March 31, 2024, from $437.4
million for the three months ended March 31, 2023. The increase in
sales was driven by higher sales volumes for I-joists and LVL
(collectively referred to as EWP), as well as higher plywood sales
prices. These increases were offset partially by decreased sales
prices for EWP, as well as lower plywood sales volumes and other
sales related to residual byproducts and lumber. Wood Products'
segment income increased $1.8 million to $71.2 million for the
three months ended March 31, 2024, from $69.4 million for the three
months ended March 31, 2023. The increase in segment income was due
primarily to higher EWP sales volumes and higher plywood sales
prices. These increases in segment income were offset partially by
lower EWP prices and higher wood fiber costs.
Comparative average net selling prices and sales volume changes
for EWP and plywood are as follows:
1Q 2024 vs. 1Q 2023
1Q 2024 vs. 4Q 2023
Average Net Selling Prices
LVL
(8)%
(4)%
I-joists
(7)%
(4)%
Plywood
3%
1%
Sales Volumes
LVL
31%
16%
I-joists
46%
5%
Plywood
(8)%
2%
Building Materials Distribution
BMD's sales increased $125.8 million, or 9%, to $1,505.0 million
for the three months ended March 31, 2024, from $1,379.2 million
for the three months ended March 31, 2023. Compared with the same
quarter in the prior year, the increase in sales was driven by
sales volume increases of 12%, offset partially by sales price
decreases of 3%. By product line, commodity sales increased 1%,
general line product sales increased 16%, and EWP sales
(substantially all of which are sourced through our Wood Products
segment) increased 12%. BMD segment income increased $2.8 million
to $72.5 million for the three months ended March 31, 2024, from
$69.7 million for the three months ended March 31, 2023. The
increase in segment income was driven by a gross margin increase of
$22.9 million, resulting primarily from higher sales volumes and
improved margins on general line and commodity products. The gross
margin improvement was offset partially by increased selling and
distribution expenses and depreciation and amortization expense of
$16.5 million and $4.0 million, respectively.
Balance Sheet and Liquidity
Boise Cascade ended first quarter 2024 with $890.2 million of
cash and cash equivalents and $395.7 million of undrawn committed
bank line availability, for total available liquidity of $1,286.0
million. The Company had $445.5 million of outstanding debt at
March 31, 2024.
Capital Allocation
We expect capital expenditures in 2024, excluding potential
acquisition spending, to total approximately $250 million to $270
million.
On May 2, 2024, our board of directors declared a quarterly
dividend of $0.20 per share on our common stock, payable on June
17, 2024, to stockholders of record on June 3, 2024.
For the three months ended March 31, 2024, the Company paid
$27.0 million for the repurchase of 205,938 shares of our common
stock. As of March 31, 2024, approximately 1.7 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. Current industry forecasts
for 2024 U.S. housing starts are generally consistent with actual
housing starts of 1.42 million in 2023, as reported by the U.S.
Census Bureau. Home affordability remains a challenge for many
consumers due to the cost of housing combined with elevated
mortgage rates. However, with low unemployment and an undersupply
of existing housing stock available for sale, new residential
construction is expected to remain an important source of supply
for homebuyers. Recent pressures on multi-family starts are
expected to continue due to increased capital costs for developers
combined with cooling rents and elevated supply. Regarding home
improvement spending, the age of U.S. housing stock and elevated
levels of homeowner equity have provided a favorable backdrop for
repair-and-remodel spending. In 2023, year-over-year growth rates
in renovation spending moderated due to economic uncertainty and
higher borrowing costs. While home improvement spending is expected
to remain healthy compared to history, recent industry forecasts
project mid-single-digit declines in 2024. Ultimately,
macroeconomic factors, the level and expectations for mortgage
rates, home affordability, home equity levels, and other factors
will likely 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.
Webcast and Conference Call
Boise Cascade will host a webcast and conference call to discuss
first quarter earnings on Tuesday, May 7, 2024, at 11 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.
Boise Cascade Company
Consolidated Statements of
Operations
(in thousands, except per-share
data) (unaudited)
Three Months Ended
March 31
December 31, 2023
2024
2023
Sales
$
1,645,420
$
1,544,329
$
1,644,256
Costs and expenses
Materials, labor, and other operating
expenses (excluding depreciation)
1,307,439
1,230,635
1,310,062
Depreciation and amortization
35,850
31,186
39,085
Selling and distribution expenses
144,110
128,788
143,796
General and administrative expenses
25,117
26,463
30,241
Other (income) expense, net
(78
)
(345
)
(104
)
1,512,438
1,416,727
1,523,080
Income from operations
132,982
127,602
121,176
Foreign currency exchange gain (loss)
(299
)
(73
)
362
Pension expense (excluding service
costs)
(37
)
(41
)
(41
)
Interest expense
(6,070
)
(6,361
)
(6,445
)
Interest income
10,597
9,685
13,142
Change in fair value of interest rate
swaps
(220
)
(804
)
(993
)
3,971
2,406
6,025
Income before income taxes
136,953
130,008
127,201
Income tax provision
(32,829
)
(33,275
)
(29,666
)
Net income
$
104,124
$
96,733
$
97,535
Weighted average common shares
outstanding:
Basic
39,608
39,593
39,653
Diluted
39,956
39,838
40,020
Net income per common share:
Basic
$
2.63
$
2.44
$
2.46
Diluted
$
2.61
$
2.43
$
2.44
Dividends declared per common share
$
0.20
$
0.15
$
5.20
Wood Products Segment
Statements of
Operations
(in thousands, except
percentages) (unaudited)
Three Months Ended
March 31
December 31, 2023
2024
2023
Segment sales
$
468,928
$
437,428
$
449,676
Costs and expenses
Materials, labor, and other operating
expenses (excluding depreciation)
357,721
327,739
340,845
Depreciation and amortization
24,384
23,790
28,565
Selling and distribution expenses
10,551
11,678
11,215
General and administrative expenses
5,020
5,178
4,844
Other (income) expense, net
14
(352
)
79
397,690
368,033
385,548
Segment income
$
71,238
$
69,395
$
64,128
(percentage of sales)
Segment sales
100.0
%
100.0
%
100.0
%
Costs and expenses
Materials, labor, and other operating
expenses (excluding depreciation)
76.3
%
74.9
%
75.8
%
Depreciation and amortization
5.2
%
5.4
%
6.4
%
Selling and distribution expenses
2.3
%
2.7
%
2.5
%
General and administrative expenses
1.1
%
1.2
%
1.1
%
Other (income) expense, net
—
%
(0.1
%)
—
%
84.8
%
84.1
%
85.7
%
Segment income
15.2
%
15.9
%
14.3
%
Building Materials
Distribution Segment
Statements of
Operations
(in thousands, except
percentages) (unaudited)
Three Months Ended
March 31
December 31, 2023
2024
2023
Segment sales
$
1,505,021
$
1,379,242
$
1,492,614
Costs and expenses
Materials, labor, and other operating
expenses (excluding depreciation)
1,278,421
1,175,550
1,265,493
Depreciation and amortization
11,107
7,070
10,116
Selling and distribution expenses
133,614
117,110
132,635
General and administrative expenses
9,534
10,030
14,100
Other (income) expense, net
(118
)
(203
)
(227
)
1,432,558
1,309,557
1,422,117
Segment income
$
72,463
$
69,685
$
70,497
(percentage of sales)
Segment sales
100.0
%
100.0
%
100.0
%
Costs and expenses
Materials, labor, and other operating
expenses (excluding depreciation)
84.9
%
85.2
%
84.8
%
Depreciation and amortization
0.7
%
0.5
%
0.7
%
Selling and distribution expenses
8.9
%
8.5
%
8.9
%
General and administrative expenses
0.6
%
0.7
%
0.9
%
Other (income) expense, net
—
%
—
%
—
%
95.2
%
94.9
%
95.3
%
Segment income
4.8
%
5.1
%
4.7
%
Segment Information
(in thousands) (unaudited)
Three Months Ended
March 31
December 31, 2023
2024
2023
Segment sales
Wood Products
$
468,928
$
437,428
$
449,676
Building Materials Distribution
1,505,021
1,379,242
1,492,614
Intersegment eliminations
(328,529
)
(272,341
)
(298,034
)
Total net sales
$
1,645,420
$
1,544,329
$
1,644,256
Segment income
Wood Products
$
71,238
$
69,395
$
64,128
Building Materials Distribution
72,463
69,685
70,497
Total segment income
143,701
139,080
134,625
Unallocated corporate costs
(10,719
)
(11,478
)
(13,449
)
Income from operations
$
132,982
$
127,602
$
121,176
Segment EBITDA
Wood Products
$
95,622
$
93,185
$
92,693
Building Materials Distribution
83,570
76,755
80,613
See accompanying summary notes to consolidated financial
statements and segment information.
Boise Cascade Company
Consolidated Balance
Sheets
(in thousands) (unaudited)
March 31, 2024
December 31, 2023
ASSETS
Current
Cash and cash equivalents
$
890,247
$
949,574
Receivables
Trade, less allowances of $4,020 and
$3,278
480,579
352,780
Related parties
225
181
Other
13,476
20,740
Inventories
814,596
712,369
Prepaid expenses and other
17,549
21,170
Total current assets
2,216,672
2,056,814
Property and equipment, net
934,286
932,633
Operating lease right-of-use assets
61,378
62,868
Finance lease right-of-use assets
24,172
24,003
Timber deposits
6,898
7,208
Goodwill
170,254
170,254
Intangible assets, net
185,836
190,743
Deferred income taxes
4,748
4,854
Other assets
10,184
9,269
Total assets
$
3,614,428
$
3,458,646
Boise Cascade Company
Consolidated Balance Sheets
(continued)
(in thousands, except per-share
data) (unaudited)
March 31, 2024
December 31, 2023
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current
Accounts payable
Trade
$
460,244
$
310,175
Related parties
1,281
1,501
Accrued liabilities
Compensation and benefits
69,308
149,561
Income taxes payable
21,774
—
Interest payable
5,083
9,958
Other
127,036
122,921
Total current liabilities
684,726
594,116
Debt
Long-term debt
445,502
445,280
Other
Compensation and benefits
39,223
40,189
Operating lease liabilities, net of
current portion
54,850
56,425
Finance lease liabilities, net of current
portion
28,347
28,084
Deferred income taxes
87,078
82,014
Other long-term liabilities
17,500
16,874
226,998
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, 45,127 and 44,983 shares issued,
respectively
451
450
Treasury stock, 5,649 and 5,443 shares at
cost, respectively
(172,377
)
(145,335
)
Additional paid-in capital
553,821
560,697
Accumulated other comprehensive loss
(509
)
(517
)
Retained earnings
1,875,816
1,780,369
Total stockholders' equity
2,257,202
2,195,664
Total liabilities and stockholders'
equity
$
3,614,428
$
3,458,646
Boise Cascade Company
Consolidated Statements of
Cash Flows
(in thousands) (unaudited)
Three Months Ended March
31
2024
2023
Cash provided by (used for)
operations
Net income
$
104,124
$
96,733
Items in net income not using (providing)
cash
Depreciation and amortization, including
deferred financing costs and other
36,621
31,853
Stock-based compensation
4,105
3,324
Pension expense
37
41
Deferred income taxes
5,062
3,393
Change in fair value of interest rate
swaps
220
804
Other
55
(518
)
Decrease (increase) in working capital,
net of acquisitions
Receivables
(119,235
)
(111,253
)
Inventories
(103,331
)
(41,247
)
Prepaid expenses and other
(1,689
)
(1,428
)
Accounts payable and accrued
liabilities
75,041
36,181
Income taxes payable
25,834
28,631
Other
618
1,478
Net cash provided by operations
27,462
47,992
Cash provided by (used for)
investment
Expenditures for property and
equipment
(34,330
)
(30,063
)
Acquisitions of businesses and facilities,
net of cash acquired
(3,387
)
—
Proceeds from sales of assets and
other
559
565
Net cash used for investment
(37,158
)
(29,498
)
Cash provided by (used for)
financing
Treasury stock purchased
(26,971
)
(1,482
)
Dividends paid on common stock
(11,205
)
(8,258
)
Tax withholding payments on stock-based
awards
(10,980
)
(5,926
)
Other
(475
)
(451
)
Net cash used for financing
(49,631
)
(16,117
)
Net increase (decrease) in cash and
cash equivalents
(59,327
)
2,377
Balance at beginning of the
period
949,574
998,344
Balance at end of the period
$
890,247
$
1,000,721
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 three months ended March 31, 2024 and 2023, and
December 31, 2023:
Three Months Ended
March 31
December 31, 2023
2024
2023
(in thousands)
Net income
$
104,124
$
96,733
$
97,535
Interest expense
6,070
6,361
6,445
Interest income
(10,597
)
(9,685
)
(13,142
)
Income tax provision
32,829
33,275
29,666
Depreciation and amortization
35,850
31,186
39,085
EBITDA
168,276
157,870
159,589
Change in fair value of interest rate
swaps
220
804
993
Adjusted EBITDA
$
168,496
$
158,674
$
160,582
The following table reconciles segment income and unallocated
corporate costs to EBITDA and adjusted EBITDA for the three months
ended March 31, 2024 and 2023, and December 31, 2023:
Three Months Ended
March 31
December 31, 2023
2024
2023
(in thousands)
Wood Products
Segment income
$
71,238
$
69,395
$
64,128
Depreciation and amortization
24,384
23,790
28,565
EBITDA
$
95,622
$
93,185
$
92,693
Building Materials Distribution
Segment income
$
72,463
$
69,685
$
70,497
Depreciation and amortization
11,107
7,070
10,116
EBITDA
$
83,570
$
76,755
$
80,613
Corporate
Unallocated corporate costs
$
(10,719
)
$
(11,478
)
$
(13,449
)
Foreign currency exchange gain (loss)
(299
)
(73
)
362
Pension expense (excluding service
costs)
(37
)
(41
)
(41
)
Change in fair value of interest rate
swaps
(220
)
(804
)
(993
)
Depreciation and amortization
359
326
404
EBITDA
(10,916
)
(12,070
)
(13,717
)
Change in fair value of interest rate
swaps
220
804
993
Corporate adjusted EBITDA
$
(10,696
)
$
(11,266
)
$
(12,724
)
Total Company adjusted EBITDA
$
168,496
$
158,674
$
160,582
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240506802952/en/
Investor Relations Contact - Chris Forrey
investor@bc.com
Media Contact - Lisa Tschampl mediarelations@bc.com
Boise Cascade (NYSE:BCC)
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