Boise Cascade Company Reports Fourth Quarter and Full Year 2020 Results

Rhea-AI Summary

Boise Cascade reported a fourth quarter net income of $26.0 million ($0.66 per share) from $1.5 billion in sales, with full year 2020 net income at $175.0 million ($4.44 per share) on $5.5 billion in sales. Fourth quarter earnings were impacted by $1.10 per share due to pension plan termination and tax-related costs. Highlights include a 78% increase in net income year-over-year in Q4 and a positive outlook for 2021 due to favorable housing market conditions. However, the company faced production disruptions due to COVID-19 and natural disasters.

Positive

• Fourth-quarter net income rose 78% from prior year, reaching $26.0 million.
• Full year net income increased 116% to $175.0 million.
• Sales surged by 34% in Q4 compared to Q4 2019, totaling $1.5 billion.
• Adjusted EBITDA increased 150% in Q4, reflecting strong operational performance.

Negative

• Fourth-quarter earnings per share were negatively impacted by $1.10 due to non-cash items.
• Production disruptions from COVID-19 and natural disasters affected operational efficiency.

Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported fourth quarter net income of $26.0 million, or $0.66 per share, on sales of $1.5 billion. For the full year 2020, Boise Cascade reported net income of $175.0 million, or $4.44 per share, on sales of $5.5 billion. Fourth quarter and full year earnings per share were negatively impacted by $1.10 per share and $1.69 per share, respectively, related to the events further described below.

Fourth quarter 2020 results included the following non-cash items that negatively effected reported earnings (after-tax amounts assume a 25% tax rate):

• $6.2 million of pre-tax pension settlement charges, or $0.12 per share after-tax, related to the elimination of our qualified defined benefit pension plan (Plan Termination).
• $38.8 million of income tax expense, or $0.98 per share, related to the release of stranded tax effects upon Plan Termination.

Full year 2020 results include the above items, as well as the following:

• $15.0 million and $1.7 million, respectively, of pre-tax accelerated depreciation and other curtailment related costs, or $0.32 per share after-tax, due to the permanent curtailment of I-joist production at our Roxboro, North Carolina, facility.
• $14.0 million pre-tax loss on extinguishment of debt, or $0.27 per share after-tax, as the Company refinanced its senior notes at a lower interest rate with an extended maturity.

For further information, see "Balance Sheet and Liquidity" and "Wood Products" below.

“In the face of many challenges presented by extraordinary market conditions and the pandemic, I am proud that we delivered the best safety performance in our Company’s history in 2020. Our associates showed great resilience, and we fully leveraged our proven values to provide direction and clarity to our team during these unprecedented times,” commented Nate Jorgensen, CEO. “We reinvested in our businesses through door shop expansions in Texas, facility expansions in a few key distribution markets, and the log utilization center project at our Florien mill. We also provided dividends to our shareholders and supported our team and communities in response to natural disasters in Louisiana and Oregon. I am optimistic and confident about 2021 and the future of Boise Cascade.”

Fourth Quarter and Year End 2020 Highlights

		4Q 2020				4Q 2019				% change			2020				2019				% change
		(in thousands, except per-share data and percentages)
Consolidated Results
Sales		$	1,472,231			$	1,101,713			34	%		$	5,474,838			$	4,643,404			18	%
Net income		26,001				14,647				78	%		174,979				80,925				116	%
Net income per common share - diluted		0.66				0.37				78	%		4.44				2.06				116	%
Adjusted EBITDA 1		113,139				45,243				150	%		423,098				214,575				97	%
Segment Results
Wood Products sales		$	358,661			$	296,286			21	%		$	1,323,901			$	1,275,167			4	%
Wood Products income		40,848				8,062				407	%		127,720				54,197				136	%
Wood Products EBITDA 1		54,517				22,651				141	%		198,861				111,868				78	%
Building Materials Distribution sales		1,330,078				986,969				35	%		4,952,018				4,137,719				20	%
Building Materials Distribution income		67,081				26,254				156	%		247,494				116,236				113	%
Building Materials Distribution EBITDA 1		72,927				31,585				131	%		269,954				137,005				97	%
1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.

As both a manufacturer and a distributor, our 2020 financial results were favorably impacted by higher commodity wood products pricing compared to pricing in 2019. During 2020, our business experienced rapidly evolving market conditions and economic uncertainties surrounding the impact of COVID-19, and various restrictions that limited residential construction activity. In response to COVID-19 uncertainties, early in the second quarter, our Wood Products segment and many other producers in our industry reduced production levels. In addition, many companies involved in the manufacture and distribution of building materials dramatically reduced inventory levels in late first quarter and early second quarter in response to falling commodity wood products prices and future demand uncertainty. As restrictions were loosened or rescinded, construction activity resumed mid-second quarter and continued at a robust pace throughout the remainder of 2020. Across commodity product lines, product demand in the third quarter exceeded supply, and producers struggled to restore capacity because of COVID-19 related disruptions and natural disasters, causing significant increases in commodity products prices. In the fourth quarter, composite lumber and panel prices fell sharply during October and November 2020 before a strong pricing rebound in December 2020. Our BMD warehouse sales were strong throughout the third and fourth quarters as our retail lumberyard customers relied on our broad base of inventory and high service levels to minimize their working capital investment given COVID-19 related uncertainties and historically high commodity product prices. In addition, we have had strong demand from our home center customers in response to elevated repair and remodel and "do-it-yourself" activity as people are spending more time at home during the pandemic.

In the fourth quarter 2020, total U.S. housing starts increased 12% compared to the same period in 2019. Single-family housing starts, the primary driver of our sales volumes, also increased 30%. For the full year 2020, total and single-family housing starts increased 7% and 12%, respectively, compared with the same period in 2019.

Wood Products

Wood Products' sales, including sales to Building Materials Distribution (BMD), increased $62.4 million, or 21%, to $358.7 million for the three months ended December 31, 2020, from $296.3 million for the three months ended December 31, 2019. The increase in sales was driven primarily by higher plywood and lumber prices, as well as higher sales volumes for I-joists. Demand for plywood in fourth quarter 2020 far outpaced industry production levels, driving the continued favorable pricing. These increases were offset partially by decreased net sales prices for LVL and I-joists (collectively referred to as EWP), as well as lower sales volumes for plywood and LVL. Wood Products' segment income increased $32.8 million to $40.8 million for the three months ended December 31, 2020, from $8.1 million for the three months ended December 31, 2019. The increase in segment income was due primarily to higher plywood and lumber sales prices, as well as higher I-joists sales volumes. These improvements were offset partially by higher wood fiber costs, as well as lower net sales prices of EWP.

For the year ended December 31, 2020, sales, including sales to BMD, increased $48.7 million, or 4%, to $1,323.9 million from $1,275.2 million in 2019. The increase in sales was driven primarily by higher plywood prices, as well as higher sales volumes for I-joists. These increases were offset partially by lower sales volumes of plywood and LVL, and lower net sales prices for EWP. The lower volume for plywood sales reflects our continued work to optimize veneer into EWP production, as well as periodic short-term disruptions related to COVID-19. Wood Products' segment income increased $73.5 million to $127.7 million for the year ended December 31, 2020, from $54.2 million for the year ended December 31, 2019. The increase in segment income was due primarily to higher plywood sales prices, as well as higher I-joist sales volumes and lower manufacturing costs. These improvements were offset partially by accelerated depreciation of $15.0 million and other closure-related costs of $1.7 million at our Roxboro, North Carolina facility, as well as lower EWP prices and higher wood fiber costs. In addition, selling and distribution expenses increased $1.9 million.

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

		4Q 2020 vs. 4Q 2019		2020 vs. 2019
Average Net Selling Prices
LVL		(3)%		(2)%
I-joists		(4)%		(2)%
Plywood		62%		30%
Sales Volumes
LVL		(2)%		(3)%
I-joists		27%		6%
Plywood		(3)%		(6)%

Building Materials Distribution

BMD's sales increased $343.1 million, or 35%, to $1,330.1 million for the three months ended December 31, 2020, from $987.0 million for the three months ended December 31, 2019. Compared with the same quarter in the prior year, the overall increase in sales was driven by sales price and sales volume increases of 26% and 9%, respectively. By product line, commodity sales increased 62%, general line product sales increased 16%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 15%. BMD segment income increased $40.8 million to $67.1 million for the three months ended December 31, 2020, from $26.3 million in the comparative prior year quarter. The improvement in segment income was driven by a gross margin increase of $45.4 million, resulting primarily from improved gross margins on commodity products, as well as higher sales of general line products and EWP compared with fourth quarter 2019. The increase in gross margin during fourth quarter 2020 was offset partially by increased selling and distribution expenses of $4.1 million.

For the year ended December 31, 2020, sales increased $814.3 million, or 20%, to $4,952.0 million from $4,137.7 million in 2019. The increase in sales was driven by a sales price and sales volume increases of 13% and 7%, respectively. By product line, commodity sales increased 34%, general line product sales increased 11%, and sales of EWP increased 6%. BMD segment income increased $131.3 million to $247.5 million for the year ended December 31, 2020, from $116.2 million for the year ended December 31, 2019. The increase in segment income was driven by a gross margin increase of $173.0 million, resulting primarily from improved gross margins on commodity products, as well as higher sales of general line products compared with 2019. The margin improvement was offset partially by increased selling and distribution expenses and general and administrative expenses of $35.7 million and $4.2 million, respectively.

Unallocated Corporate Costs

Unallocated corporate expenses increased $6.2 million to $40.2 million for the year ended December 31, 2020, from $34.0 million for the year ended December 31, 2019. The increase was due primarily to higher incentive compensation and business interruption losses. As part of our self-insured risk retention program, corporate absorbed approximately $3.5 million of estimated business interruption losses at Wood Products facilities in 2020. The losses resulted from downtime at our Louisiana manufacturing facilities due to hurricanes and from a fire-related production disruption at our Chester, South Carolina, plywood plant.

Balance Sheet and Liquidity

Boise Cascade ended fourth quarter 2020 with $405.4 million of cash and cash equivalents and $345.2 million of undrawn committed bank line availability, for total available liquidity of $750.6 million. The Company had $443.8 million of outstanding debt at December 31, 2020.

On July 27, 2020, we issued $400 million of 4.875% senior notes due July 1, 2030 (2030 Notes). With proceeds from the 2030 Notes issuance, we retired $350 million of 5.625% senior notes due 2024 (2024 Notes) and paid-off our American AgCredit term loan of $45.0 million. In connection with these transactions, we recognized a pre-tax loss on extinguishment of debt of $14.0 million during 2020.

In December 2020, we eliminated our qualified defined benefit pension plan (Pension Plan). The process of eliminating the Pension Plan included lump-sum payments made to eligible plan participants at their election and the purchase of a buy-out group annuity contract (Buy-Out) from The Prudential Insurance Company of America (Prudential), which was funded with plan assets. When the Buy-Out became effective on December 31, 2020, we irrevocably transferred to Prudential the future benefit obligations and annuity administration for all remaining plan participants (or their beneficiaries) in the Pension Plan. These transactions fully eliminated the liabilities of our Pension Plan, resulting in a non-cash settlement charge of $6.2 million in fourth quarter 2020.

Prior to the Plan Termination, "Accumulated other comprehensive loss" on our Consolidated Balance Sheet included the stranded tax effects of our conversion from a limited liability company to a corporation in 2013 and the adoption of the Tax Cuts and Jobs Act (the "Tax Act") in 2017. Upon Plan Termination, these stranded tax effects of $38.8 million were required to be released into income tax expense under GAAP. For additional information on the Plan Termination, see our Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

We expect capital expenditures in 2021 to total approximately $80 million to $90 million. This level of capital expenditures could increase or decrease as a result of a number of factors, including acquisitions, efforts to accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, and timing of equipment purchases.

Dividends

On February 5, 2021, our board of directors declared a dividend of $0.10 per share of our common stock, payable on March 15, 2021, to stockholders of record on February 22, 2021.

Future dividend declarations, including amount per share, record date and payment date, will be made at the discretion of our board of directors and will depend upon, among other things, legal capital requirements and surplus, our future operations and earnings, general financial condition, contractual restrictions, and other factors that our board of directors may deem relevant.

Outlook

As we begin 2021, Wood Products continues to experience periodic short-term disruptions at many locations due to COVID-19 as we continue to make efforts to restore production rates to pre-COVID-19 levels in response to strong end-product demand, particularly for our EWP. In addition, we have experienced COVID-19 related short-term disruptions at our BMD locations and our activity levels across our distribution network continue to vary widely as COVID-19 impacts geographies across the U.S. to differing degrees, and federal, state, or local restrictions are implemented or rescinded. To date, we have not experienced significant supply chain disruptions that would limit our ability to meet customer delivery commitments or source the necessary raw materials and finished goods needed by our operations. We continue to conduct business with modifications to mill and distribution center housekeeping and cleanliness protocols, employee travel, employee work locations, and virtualization or cancellation of certain sales and marketing events, among other modifications. In addition, we continue to actively monitor evolving developments and may take actions that alter our business operations as may be required by federal, state, or local authorities, or that we determine are in the best interests of our employees, customers, suppliers, communities, and stockholders.

While there continues to be a heightened level of economic uncertainty due to the pandemic, low mortgage rates, continuation of work-from-home practices by many in the economy, and demographics in the U.S. have created a favorable demand environment for new residential construction, which we expect to continue in 2021. Furthermore, with homeowners spending more time at home, repair and remodel spending may remain elevated as homeowners invest in existing homes. As of February 2021, the Blue Chip Economic Indicators consensus forecast for 2021 single- and multi-family housing starts in the U.S. was 1.51 million units, compared with actual housing starts of 1.38 million in 2020 and 1.29 million in 2019, as reported by the U.S. Census Bureau. Although we believe that current U.S. demographics support the higher level of forecasted housing starts, and many national home builders are reporting strong near-term backlogs, the impacts of COVID-19 on residential construction and residential repair-and-remodeling activity are uncertain.

Strong demand when coupled with capacity constraints in late fourth quarter 2020 and early first quarter 2021 created supply/demand imbalances in the marketplace and historically high pricing levels for commodity lumber and panel products. As a wholesale distributor of a broad mix of commodity products and a manufacturer of certain commodity products, our sales and profitability are influenced by changes in commodity product prices.

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 fourth quarter and full year earnings on Tuesday, February 23, 2021, at 11 a.m. Eastern.

To participate in the conference call, dial 844-795-4410 and use participant passcode 9687894 (international callers should dial 661-378-9637). To join the webcast, go to the Investor Relations section at www.bc.com and select the Event Calendar link.

A replay of the conference call will be available from Tuesday, February 23, 2021, at 2 p.m. Eastern through Tuesday, March 2, 2021, at 2 p.m. Eastern. Replay numbers are 855-859-2056 for U.S. callers and 404-537-3406 for international callers with a passcode of 9687894. The archived webcast will be available in the Investor Relations 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 (loss) 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 and loss on extinguishment of debt.

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 (loss), income (loss) 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 (loss) or segment income (loss) 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. 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, the effect of COVID-19, 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)
	Three Months Ended															Year Ended
	December 31										September 30, 2020					December 31
	2020					2019										2020					2019
Sales	$	1,472,231				$	1,101,713				$	1,589,313				$	5,474,838				$	4,643,404
Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	1,233,182					939,375					1,261,697					4,536,051					3,965,776
Depreciation and amortization	19,909					20,501					20,029					95,169					80,141
Selling and distribution expenses	102,366					98,280					122,884					428,279					390,739
General and administrative expenses	17,737					19,008					26,060					78,636					71,072
Loss on curtailment of facility	—					—					—					1,707					—
Other (income) expense, net	(103		)			(226		)			71					(33		)			(783		)
	1,373,091					1,076,938					1,430,741					5,139,809					4,506,945
Income from operations	99,140					24,775					158,572					335,029					136,459
Foreign currency exchange gain	556					239					265					357					449
Pension expense (excluding service costs)	(6,466		)			(272		)			(302		)			(7,457		)			(2,474		)
Interest expense	(6,167		)			(6,596		)			(7,002		)			(26,223		)			(26,051		)
Interest income	41					1,066					113					999					2,811
Change in fair value of interest rate swaps	255					140					147					(2,426		)			(2,963		)
Loss on extinguishment of debt	—					—					(13,968		)			(13,968		)			—
	(11,781		)			(5,423		)			(20,747		)			(48,718		)			(28,228		)
Income before income taxes	87,359					19,352					137,825					286,311					108,231
Income tax provision	(61,358		)			(4,705		)			(34,633		)			(111,332		)			(27,306		)
Net income	$	26,001				$	14,647				$	103,192				$	174,979				$	80,925
Weighted average common shares outstanding:
Basic	39,317					39,093					39,315					39,277					39,039
Diluted	39,587					39,418					39,526					39,431					39,242
Net income per common share:
Basic	$	0.66				$	0.37				$	2.62				$	4.45				$	2.07
Diluted	$	0.66				$	0.37				$	2.61				$	4.44				$	2.06
Dividends declared per common share	$	0.10				$	1.10				$	1.70				$	2.00				$	1.37

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

Wood Products Segment Statements of Operations (in thousands, except percentages)
	Three Months Ended													Year Ended
	December 31									September 30, 2020				December 31
	2020				2019									2020					2019
Segment sales	$	358,661			$	296,286				$	363,674			$	1,323,901				$	1,275,167
Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	292,425				261,611					268,930				1,075,015					1,117,540
Depreciation and amortization	13,669				14,589					13,938				71,141					57,671
Selling and distribution expenses	8,147				8,201					9,684				33,367					31,485
General and administrative expenses	3,508				3,962					5,084				15,055					14,442
Loss on curtailment of facility	—				—					—				1,707					—
Other (income) expense, net	64				(139		)			3				(104		)			(168		)
	317,813				288,224					297,639				1,196,181					1,220,970
Segment income	$	40,848			$	8,062				$	66,035			$	127,720				$	54,197
	(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)	81.5		%		88.3			%		73.9		%		81.2			%		87.6			%
Depreciation and amortization	3.8		%		4.9			%		3.8		%		5.4			%		4.5			%
Selling and distribution expenses	2.3		%		2.8			%		2.7		%		2.5			%		2.5			%
General and administrative expenses	1.0		%		1.3			%		1.4		%		1.1			%		1.1			%
Loss on curtailment of facility	—		%		—			%		—		%		0.1			%		—			%
Other (income) expense, net	—		%		—			%		—		%		—			%		—			%
	88.6		%		97.3			%		81.8		%		90.4			%		95.7			%
Segment income	11.4		%		2.7			%		18.2		%		9.6			%		4.3			%

Building Materials Distribution Segment Statements of Operations (in thousands, except percentages)
	Three Months Ended															Year Ended
	December 31										September 30, 2020					December 31
	2020					2019										2020					2019
Segment sales	$	1,330,078				$	986,969				$	1,437,683				$	4,952,018				$	4,137,719
Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	1,156,836					859,102					1,201,722					4,258,784					3,617,477
Depreciation and amortization	5,846					5,331					5,686					22,460					20,769
Selling and distribution expenses	94,162					90,027					113,146					394,689					359,039
General and administrative expenses	6,322					6,365					9,282					28,945					24,785
Other (income) expense, net	(169		)			(110		)			(54		)			(354		)			(587		)
	1,262,997					960,715					1,329,782					4,704,524					4,021,483
Segment income	$	67,081				$	26,254				$	107,901				$	247,494				$	116,236
	(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)	87.0			%		87.0			%		83.6			%		86.0			%		87.4			%
Depreciation and amortization	0.4			%		0.5			%		0.4			%		0.5			%		0.5			%
Selling and distribution expenses	7.1			%		9.1			%		7.9			%		8.0			%		8.7			%
General and administrative expenses	0.5			%		0.6			%		0.6			%		0.6			%		0.6			%
Other (income) expense, net	—			%		—			%		—			%		—			%		—			%
	95.0			%		97.3			%		92.5			%		95.0			%		97.2			%
Segment income	5.0			%		2.7			%		7.5			%		5.0			%		2.8			%

Segment Information (in thousands)
		Three Months Ended															Year Ended
		December 31										September 30, 2020					December 31
		2020					2019										2020					2019
Segment sales
Wood Products		$	358,661				$	296,286				$	363,674				$	1,323,901				$	1,275,167
Building Materials Distribution		1,330,078					986,969					1,437,683					4,952,018					4,137,719
Intersegment eliminations		(216,508		)			(181,542		)			(212,044		)			(801,081		)			(769,482		)
Total net sales		$	1,472,231				$	1,101,713				$	1,589,313				$	5,474,838				$	4,643,404
Segment income
Wood Products		$	40,848				$	8,062				$	66,035				$	127,720				$	54,197
Building Materials Distribution		67,081					26,254					107,901					247,494					116,236
Total segment income		107,929					34,316					173,936					375,214					170,433
Unallocated corporate costs		(8,789		)			(9,541		)			(15,364		)			(40,185		)			(33,974		)
Income from operations		$	99,140				$	24,775				$	158,572				$	335,029				$	136,459
Segment EBITDA (a)
Wood Products		$	54,517				$	22,651				$	79,973				$	198,861				$	111,868
Building Materials Distribution		72,927					31,585					113,587					269,954					137,005

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

Boise Cascade Company Consolidated Balance Sheets (in thousands)
	December 31, 2020				December 31, 2019
ASSETS
Current
Cash and cash equivalents	$	405,382			$	285,237
Receivables
Trade, less allowances of $1,111 and $591	375,865				215,894
Related parties	201				568
Other	15,067				15,184
Inventories	503,480				497,596
Prepaid expenses and other	8,860				8,285
Total current assets	1,308,855				1,022,764
Property and equipment, net	461,456				476,949
Operating lease right-of-use assets	62,447				64,228
Finance lease right-of-use assets	29,523				21,798
Timber deposits	11,761				12,287
Goodwill	60,382				60,382
Intangible assets, net	16,574				17,797
Deferred income taxes	7,460				7,952
Other assets	7,260				9,194
Total assets	$	1,965,718			$	1,693,351

Boise Cascade Company Consolidated Balance Sheets (continued) (in thousands, except per-share data)
	December 31, 2020					December 31, 2019
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable
Trade	$	307,653				$	222,930
Related parties	1,199					1,624
Accrued liabilities
Compensation and benefits	118,400					83,943
Income taxes payable	8,101					—
Interest payable	8,477					6,723
Other	80,172					69,772
Total current liabilities	524,002					384,992
Debt
Long-term debt	443,792					440,544
Other
Compensation and benefits	25,951					45,586
Operating lease liabilities, net of current portion	56,001					58,029
Finance lease liabilities, net of current portion	31,607					23,419
Deferred income taxes	18,263					26,694
Other long-term liabilities	15,303					12,757
	147,125					166,485
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, 44,568 and 44,353 shares issued, respectively	446					444
Treasury stock, 5,367 shares at cost	(138,909		)			(138,909		)
Additional paid-in capital	538,006					533,345
Accumulated other comprehensive loss	(1,078		)			(50,248		)
Retained earnings	452,334					356,698
Total stockholders' equity	850,799					701,330
Total liabilities and stockholders' equity	$	1,965,718				$	1,693,351

Boise Cascade Company Consolidated Statements of Cash Flows (in thousands)
	Year Ended December 31
	2020					2019
Cash provided by (used for) operations
Net income	$	174,979				$	80,925
Items in net income not using (providing) cash
Depreciation and amortization, including deferred financing costs and other	97,131					82,377
Stock-based compensation	7,820					7,973
Pension expense	8,125					3,121
Deferred income taxes	27,497					9,025
Change in fair value of interest rate swaps	2,426					2,963
Loss on curtailment of facility (excluding severance)	1,476					—
Other	169					(353		)
Loss on extinguishment of debt	13,968					—
Decrease (increase) in working capital, net of acquisitions
Receivables	(159,906		)			2,160
Inventories	(6,249		)			40,176
Prepaid expenses and other	(1,133		)			(132		)
Accounts payable and accrued liabilities	131,541					5,212
Pension contributions	(12,759		)			(5,238		)
Income taxes payable	9,022					19,387
Other	409					(1,949		)
Net cash provided by operations	294,516					245,647
Cash provided by (used for) investment
Expenditures for property and equipment	(79,429		)			(82,720		)
Acquisitions of businesses and facilities	—					(15,676		)
Proceeds from sales of facilities	—					2,493
Proceeds from sales of assets and other	713					1,838
Net cash used for investment	(78,716		)			(94,065		)
Cash provided by (used for) financing
Borrowings of long-term debt, including revolving credit facility	400,000					5,500
Payments of long-term debt, including revolving credit facility	(405,774		)			(5,500		)
Payments of deferring financing costs	(6,222		)			—
Dividends paid on common stock	(79,195		)			(53,954		)
Tax withholding payments on stock-based awards	(3,309		)			(3,574		)
Other	(1,155		)			(488		)
Net cash used for financing	(95,655		)			(58,016		)
Net increase in cash and cash equivalents	120,145					93,566
Balance at beginning of the period	285,237					191,671
Balance at end of the period	$	405,382				$	285,237

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 2020 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 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 and loss on extinguishment of debt. The following table reconciles net income to EBITDA and Adjusted EBITDA for the three months ended December 31, 2020 and 2019, and September 30, 2020, and the year ended December 31, 2020 and 2019:

		Three Months Ended															Year Ended
		December 31										September 30, 2020					December 31
		2020					2019										2020					2019
		(in thousands)
Net income		$	26,001				$	14,647				$	103,192				$	174,979				$	80,925
Interest expense		6,167					6,596					7,002					26,223					26,051
Interest income		(41		)			(1,066		)			(113		)			(999		)			(2,811		)
Income tax provision		61,358					4,705					34,633					111,332					27,306
Depreciation and amortization		19,909					20,501					20,029					95,169					80,141
EBITDA		113,394					45,383					164,743					406,704					211,612
Change in fair value of interest rate swaps		(255		)			(140		)			(147		)			2,426					2,963
Loss on extinguishment of debt		—					—					13,968					13,968					—
Adjusted EBITDA		$	113,139				$	45,243				$	178,564				$	423,098				$	214,575

The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the three months ended December 31, 2020 and 2019, and September 30, 2020, and the year ended December 31, 2020 and 2019:

		Three Months Ended															Year Ended
		December 31										September 30, 2020					December 31
		2020					2019										2020					2019
		(in thousands)
Wood Products
Segment income		$	40,848				$	8,062				$	66,035				$	127,720				$	54,197
Depreciation and amortization		13,669					14,589					13,938					71,141					57,671
EBITDA		$	54,517				$	22,651				$	79,973				$	198,861				$	111,868
Building Materials Distribution
Segment income		$	67,081				$	26,254				$	107,901				$	247,494				$	116,236
Depreciation and amortization		5,846					5,331					5,686					22,460					20,769
EBITDA		$	72,927				$	31,585				$	113,587				$	269,954				$	137,005
Corporate
Unallocated corporate costs		$	(8,789	)			$	(9,541	)			$	(15,364	)			$	(40,185	)			$	(33,974	)
Foreign currency exchange gain		556					239					265					357					449
Pension expense (excluding service costs)		(6,466		)			(272		)			(302		)			(7,457		)			(2,474		)
Change in fair value of interest rate swaps		255					140					147					(2,426		)			(2,963		)
Loss on extinguishment of debt		—					—					(13,968		)			(13,968		)			—
Depreciation and amortization		394					581					405					1,568					1,701
EBITDA		(14,050		)			(8,853		)			(28,817		)			(62,111		)			(37,261		)
Change in fair value of interest rate swaps		(255		)			(140		)			(147		)			2,426					2,963
Loss on extinguishment of debt		—					—					13,968					13,968					—
Corporate adjusted EBITDA		$	(14,305	)			$	(8,993	)			$	(14,996	)			$	(45,717	)			$	(34,298	)
Total company adjusted EBITDA		$	113,139				$	45,243				$	178,564				$	423,098				$	214,575

 

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FAQ

What is Boise Cascade's fourth quarter 2020 net income?

Boise Cascade reported a net income of $26.0 million for Q4 2020.

How did Boise Cascade's sales perform in 2020?

Boise Cascade's sales for the full year 2020 were $5.5 billion, an 18% increase from the previous year.

What were the earnings per share for Boise Cascade in 2020?

Boise Cascade's earnings per share for 2020 were $4.44.

How did the pandemic affect Boise Cascade's production?

The pandemic caused production disruptions and reduced efficiency at Boise Cascade's facilities.

What is the outlook for Boise Cascade in 2021?

Boise Cascade is optimistic about 2021, anticipating strong demand in the housing market.