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Boise Cascade Company Reports Third Quarter 2020 Results

·19-min read

Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported net income of $103.2 million, or $2.61 per share, on sales of $1.6 billion for the third quarter ended September 30, 2020, compared with net income of $27.2 million, or $0.69 per share, on sales of $1.3 billion for the third quarter ended September 30, 2019. Third quarter 2020 results include a $10.5 million after-tax loss on extinguishment of debt, or $0.27 per share, as the Company refinanced its senior notes at a lower interest rate with an extended maturity. Third quarter 2019 results include $1.0 million of after-tax losses, or $0.03 per share, from a non-cash pension settlement charge.

"Extraordinary market conditions, along with great execution by both of our businesses, helped us deliver outstanding results in the third quarter. Financial results aside, I am proud that associates across our organization continue to effectively adapt to challenges brought about by the pandemic without losing focus on our core value of safety. It has also been inspiring to witness our teams in Louisiana and Oregon caring for each other and their communities in response to the gulf coast hurricanes and the catastrophic fires in the Pacific Northwest," commented Nate Jorgensen, CEO. "We look to the future with optimism, as our balance sheet provides us the flexibility to pursue organic and acquisition growth opportunities in support of our customers and suppliers. Together with our Board of Directors, we took action to return a portion of our higher than targeted cash balance to our shareholders through our recently announced supplemental dividend."

Third Quarter 2020 Highlights

3Q 2020

3Q 2019

% change

(in thousands, except per-share data and

percentages)

Consolidated Results

Sales

$

1,589,313

$

1,269,524

25

%

Net income

103,192

27,171

280

%

Net income per common share - diluted

2.61

0.69

278

%

Adjusted EBITDA 1

178,564

64,054

179

%

Segment Results

Wood Products sales

$

363,674

$

325,102

12

%

Wood Products income

66,035

15,597

323

%

Wood Products EBITDA 1

79,973

30,849

159

%

Building Materials Distribution sales

1,437,683

1,145,621

25

%

Building Materials Distribution income

107,901

38,665

179

%

Building Materials Distribution EBITDA 1

113,587

43,943

158

%

1

For reconciliations of non-GAAP measures, see summary notes at the end of this press release.

In response to rapidly evolving market conditions and economic uncertainties surrounding the impact of COVID-19, and various restrictions that limited residential construction activity, our Wood Products segment and many other producers in our industry reduced production levels early in the second quarter. 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 through the third quarter. 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. Our BMD warehouse sales were strong throughout the third quarter as our retail lumberyard customers are relying 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 third quarter 2020, total U.S. housing starts increased 11% compared to the same period last year. Single-family housing starts, the primary driver of our sales volumes, also increased 17%. On a year-to-date basis through September 2020, total and single-family housing starts increased 5% and 6%, respectively, compared with the same period in 2019.

Wood Products

Wood Products' sales, including sales to Building Materials Distribution (BMD), increased $38.6 million, or 12%, to $363.7 million for the three months ended September 30, 2020, from $325.1 million for the three months ended September 30, 2019. The increase in sales was driven primarily by higher plywood prices and higher sales volumes for I-joists. Demand for plywood in third quarter 2020 far outpaced industry production levels, driving the sharp increase in pricing. These increases were offset partially by lower sales volumes for plywood and LVL, as well as decreased net sales prices for LVL and I-joists (collectively referred to as EWP).

Wood Products' segment income increased $50.4 million to $66.0 million for the three months ended September 30, 2020, from $15.6 million for the three months ended September 30, 2019. The increase in segment income was due primarily to higher plywood sales prices, offset partially by higher wood fiber costs, as well as lower net sales prices of EWP. In addition, selling and distribution expenses and general and administrative expenses increased $2.0 million and $1.7 million, respectively.

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

3Q 2020 vs. 3Q 2019

3Q 2020 vs. 2Q 2020

Average Net Selling Prices

LVL

(2)%

(1)%

I-joists

(2)%

(2)%

Plywood

69%

49%

Sales Volumes

LVL

(2)%

19%

I-joists

5%

27%

Plywood

(8)%

1%

Building Materials Distribution

BMD's sales increased $292.1 million, or 25%, to $1,437.7 million for the three months ended September 30, 2020, from $1,145.6 million for the three months ended September 30, 2019. Compared with the same quarter in the prior year, the overall increase in sales was driven by sales price increases of 25%, with relatively flat sales volumes. By product line, commodity sales increased 54%, general line product sales increased 6%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 6%.

BMD segment income increased $69.2 million to $107.9 million for the three months ended September 30, 2020, from $38.7 million in the comparative prior year quarter. The increase in segment income was driven by a gross margin increase of $86.7 million, resulting primarily from improved gross margins on commodity products compared with third quarter 2019. The margin improvement was offset partially by increased selling and distribution expenses and general and administrative expenses of $14.3 million and $2.5 million, respectively.

Unallocated Corporate Costs

Unallocated corporate expenses increased $6.0 million to $15.4 million from $9.4 million for the three months ended September 30, 2020, compared with the same period in the prior year. 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 $3.2 million of estimated business interruption losses at Wood Products facilities in third quarter 2020. The losses resulted from downtime at our Louisiana manufacturing facilities due to Hurricane Laura and from a fire-related production disruption at our Chester, South Carolina, plywood plant.

Balance Sheet and Liquidity

Boise Cascade ended third quarter 2020 with $503.9 million of cash and cash equivalents and $345.4 million of undrawn committed bank line availability, for total available liquidity of $849.3 million. The Company had $443.6 million of outstanding debt at September 30, 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 third quarter 2020.

In response to the uncertainty of the impacts of COVID-19, we reduced our planned capital spending for 2020 from our previously expected range of $85-to-$95 million to $60-to-$75 million. We expect our capital spending, excluding acquisitions, to be approximately $80-to-$90 million in 2021.

We have announced our intention to terminate our qualified defined benefit pension plan (Pension Plan). We expect to fully eliminate the liabilities of our Pension Plan in fourth quarter 2020, upon which we will record the related non-cash accounting adjustments as required by the application of pension settlement accounting rules. We do not expect any further cash contributions to terminate the Pension Plan. For additional information on the termination of our Pension Plan, see our Form 10-Q for the quarterly period ended September 30, 2020, filed with the Securities and Exchange Commission.

Dividends

On September 28, 2020, our board of directors declared a supplemental dividend of $1.60 per share on our common stock, payable on November 2, 2020, to stockholders of record on October 15, 2020. At September 30, 2020, we accrued $62.7 million in "Dividends payable" on our Consolidated Balance Sheets, representing our supplemental dividend declaration. On October 29, 2020, our board of directors declared a quarterly dividend of $0.10 per share on our common stock, payable on December 15, 2020, to stockholders of record on December 1, 2020.

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 the fourth quarter, Wood Products continues to make efforts to restore production rates to pre-COVID-19 levels in response to strong end-product demand, particularly for our EWP. However, we continue to experience periodic short-term disruptions at many locations due to COVID-19. In addition, we expect activity levels across our distribution network to 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 given 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 into next year. Furthermore, with homeowners spending more time at home, repair and remodel spending may continue to strengthen as homeowners invest in existing homes. As of October 2020, the Blue Chip Economic Indicators consensus forecast for 2020 and 2021 single- and multi-family housing starts in the U.S. were 1.32 million and 1.38 million units, respectively, compared with actual housing starts of 1.29 million in 2019, as reported by the U.S. Census Bureau. Although we believe that current U.S. demographics support a higher level of housing starts, and many national home builders are reporting strong near-term backlogs, the impacts of COVID-19 on residential construction are uncertain. A re-acceleration of COVID-19 cases could prompt state or local officials to reinstitute restrictions that could limit or constrain building activity. In addition, the economic consequences of COVID-19 may adversely affect the pace of household formation rates and residential repair-and-remodeling activity due to high unemployment rates, lower wages, reduced consumer confidence, prospective home buyers' lack of ability to view homes in person, homebuyers' access to and cost of financing, and housing affordability, as well as other factors.

Strong demand when coupled with capacity constraints in third quarter 2020 created supply/demand imbalances in the marketplace and historically high pricing levels for commodity lumber and panel products. However, October 2020 composite lumber and panel prices have declined by approximately 35% and 10% from the peaks reached in September 2020 and are at risk for further price erosion that will be dependent on the impact of COVID-19 on residential construction, capacity restoration and industry operating rates, net import and export activity, transportation constraints or disruptions, inventory levels in various distribution channels, and seasonal demand patterns. As a wholesale distributor of a broad mix of commodity products and a manufacturer of certain commodity products, we have sales and profitability exposure to declines in commodity product prices. As previously announced, we will also continue to evaluate plywood market conditions, log supply availability, operating costs, environmental permits, and other factors influencing our Elgin plywood operations as we approach 2021.

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 third quarter earnings on Monday, November 2, 2020, at 11 a.m. Eastern.

To participate in the conference call, dial 844-795-4410 and use participant passcode 2863868 (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 Monday, November 2, 2020, at 2 p.m. Eastern through Monday, November 9, 2020, 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 2863868. 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

Nine Months Ended

September 30

June 30,

2020

September 30

2020

2019

2020

2019

Sales

$

1,589,313

$

1,269,524

$

1,242,760

$

4,002,607

$

3,541,691

Costs and expenses

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

1,261,697

1,078,924

1,048,902

3,302,869

3,026,401

Depreciation and amortization

20,029

20,969

19,899

75,260

59,640

Selling and distribution expenses

122,884

106,567

103,566

325,913

292,459

General and administrative expenses

26,060

18,603

18,755

60,899

52,064

Loss on curtailment of facility

38

1,707

Other (income) expense, net

71

(437

)

(170

)

70

(557

)

1,430,741

1,224,626

1,190,990

3,766,718

3,430,007

Income from operations

158,572

44,898

51,770

235,889

111,684

Foreign currency exchange gain (loss)

265

(200

)

409

(199

)

210

Pension expense (excluding service costs)

(302

)

(1,613

)

(302

)

(991

)

(2,202

)

Interest expense

(7,002

)

(6,532

)

(6,633

)

(20,056

)

(19,455

)

Interest income

113

837

190

958

1,745

Change in fair value of interest rate swaps

147

(569

)

(514

)

(2,681

)

(3,103

)

Loss on extinguishment of debt

(13,968

)

(13,968

)

(20,747

)

(8,077

)

(6,850

)

(36,937

)

(22,805

)

Income before income taxes

137,825

36,821

44,920

198,952

88,879

Income tax provision

(34,633

)

(9,650

)

(11,334

)

(49,974

)

(22,601

)

Net income

$

103,192

$

27,171

$

33,586

$

148,978

$

66,278

Weighted average common shares outstanding:

Basic

39,315

39,087

39,312

39,264

39,020

Diluted

39,526

39,292

39,387

39,396

39,202

Net income per common share:

Basic

$

2.62

$

0.70

$

0.85

$

3.79

$

1.70

Diluted

$

2.61

$

0.69

$

0.85

$

3.78

$

1.69

Dividends declared per common share

$

1.70

$

0.09

$

0.10

$

1.90

$

0.27

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

Wood Products Segment

Statements of Operations

(in thousands, except percentages)

Three Months Ended

Nine Months Ended

September 30

June 30,

2020

September 30

2020

2019

2020

2019

Segment sales

$

363,674

$

325,102

$

281,505

$

965,240

$

978,881

Costs and expenses

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

268,930

283,354

239,626

782,590

855,929

Depreciation and amortization

13,938

15,252

13,931

57,472

43,082

Selling and distribution expenses

9,684

7,718

7,552

25,220

23,284

General and administrative expenses

5,084

3,379

3,451

11,547

10,480

Loss on curtailment of facility

38

1,707

Other (income) expense, net

3

(198

)

(167

)

(168

)

(29

)

297,639

309,505

264,431

878,368

932,746

Segment income

$

66,035

$

15,597

$

17,074

$

86,872

$

46,135

(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)

73.9

%

87.2

%

85.1

%

81.1

%

87.4

%

Depreciation and amortization

3.8

%

4.7

%

4.9

%

6.0

%

4.4

%

Selling and distribution expenses

2.7

%

2.4

%

2.7

%

2.6

%

2.4

%

General and administrative expenses

1.4

%

1.0

%

1.2

%

1.2

%

1.1

%

Loss on curtailment of facility

%

%

%

0.2

%

%

Other (income) expense, net

%

(0.1

)

%

(0.1

)

%

%

%

81.8

%

95.2

%

93.9

%

91.0

%

95.3

%

Segment income

18.2

%

4.8

%

6.1

%

9.0

%

4.7

%

Building Materials Distribution Segment

Statements of Operations

(in thousands, except percentages)

Three Months Ended

Nine Months Ended

September 30

June 30,

2020

September 30

2020

2019

2020

2019

Segment sales

$

1,437,683

$

1,145,621

$

1,134,260

$

3,621,940

$

3,150,750

Costs and expenses

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

1,201,722

996,313

982,385

3,101,948

2,758,375

Depreciation and amortization

5,686

5,278

5,584

16,614

15,438

Selling and distribution expenses

113,146

98,797

95,958

300,527

269,012

General and administrative expenses

9,282

6,759

7,206

22,623

18,420

Other (income) expense, net

(54

)

(191

)

(83

)

(185

)

(477

)

1,329,782

1,106,956

1,091,050

3,441,527

3,060,768

Segment income

$

107,901

$

38,665

$

43,210

$

180,413

$

89,982

(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)

83.6

%

87.0

%

86.6

%

85.6

%

87.5

%

Depreciation and amortization

0.4

%

0.5

%

0.5

%

0.5

%

0.5

%

Selling and distribution expenses

7.9

%

8.6

%

8.5

%

8.3

%

8.5

%

General and administrative expenses

0.6

%

0.6

%

0.6

%

0.6

%

0.6

%

Other (income) expense, net

%

%

%

%

%

92.5

%

96.6

%

...

96.2

%

95.0

%

97.1

%

Segment income

7.5

%

3.4

%

3.8

%

5.0

%

2.9

%

Segment Information

(in thousands)

Three Months Ended

Nine Months Ended

September 30

June 30,

2020

September 30

2020

2019

2020

2019

Segment sales

Wood Products

$

363,674

$

325,102

$

281,505

$

965,240

$

978,881

Building Materials Distribution

1,437,683

1,145,621

1,134,260

3,621,940

3,150,750

Intersegment eliminations

(212,044

)

(201,199

)

(173,005

)

(584,573

)

(587,940

)

Total net sales

$

1,589,313

$

1,269,524

$

1,242,760

$

4,002,607

$

3,541,691

Segment income

Wood Products

$

66,035

$

15,597

$

17,074

$

86,872

$

46,135

Building Materials Distribution

107,901

38,665

43,210

180,413

89,982

Total segment income

173,936

54,262

60,284

267,285

136,117

Unallocated corporate costs

(15,364

)

(9,364

)

(8,514

)

(31,396

)

(24,433

)

Income from operations

$

158,572

$

44,898

$

51,770

$

235,889

$

111,684

Segment EBITDA (a)

Wood Products

$

79,973

$

30,849

$

31,005

$

144,344

$

89,217

Building Materials Distribution

113,587

43,943

48,794

197,027

105,420

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

Boise Cascade Company

Consolidated Balance Sheets

(in thousands)

September 30, 2020

December 31, 2019

ASSETS

Current

Cash and cash equivalents

$

503,935

$

285,237

Receivables

Trade, less allowances of $1,629 and $591

425,585

215,894

Related parties

375

568

Other

11,929

15,184

Inventories

454,327

497,596

Prepaid expenses and other

17,368

8,285

Total current assets

1,413,519

1,022,764

Property and equipment, net

447,330

476,949

Operating lease right-of-use assets

63,231

64,228

Finance lease right-of-use assets

30,033

21,798

Timber deposits

13,945

12,287

Goodwill

60,382

60,382

Intangible assets, net

16,880

17,797

Deferred income taxes

7,619

7,952

Other assets

6,897

9,194

Total assets

$

2,059,836

$

1,693,351

Boise Cascade Company

Consolidated Balance Sheets (continued)

(in thousands, except per-share data)

September 30, 2020

December 31, 2019

LIABILITIES AND STOCKHOLDERS' EQUITY

Current

Accounts payable

Trade

$

381,038

$

222,930

Related parties

1,654

1,624

Accrued liabilities

Compensation and benefits

118,437

83,943

Income taxes payable

16,606

Interest payable

3,596

6,723

Dividends payable

62,722

Other

92,335

69,772

Total current liabilities

676,388

384,992

Debt

Long-term debt

443,583

440,544

Other

Compensation and benefits

32,005

45,586

Operating lease liabilities, net of current portion

57,494

58,029

Finance lease liabilities, net of current portion

31,923

23,419

Deferred income taxes

24,275

26,694

Other long-term liabilities

16,032

12,757

161,729

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

536,025

533,345

Accumulated other comprehensive loss

(49,732

)

(50,248

)

Retained earnings

430,306

356,698

Total stockholders' equity

778,136

701,330

Total liabilities and stockholders' equity

$

2,059,836

$

1,693,351

Boise Cascade Company

Consolidated Statements of Cash Flows

(in thousands)

Nine Months Ended September 30

2020

2019

Cash provided by (used for) operations

Net income

$

148,978

$

66,278

Items in net income not using (providing) cash

Depreciation and amortization, including deferred financing costs and other

76,784

61,340

Stock-based compensation

5,839

6,016

Pension expense

1,492

2,687

Deferred income taxes

(2,460

)

10,008

Change in fair value of interest rate swaps

2,681

3,103

Loss on curtailment of facility (excluding severance)

1,476

Other

205

(235

)

Loss on extinguishment of debt

13,968

Decrease (increase) in working capital, net of acquisitions

Receivables

(205,995

)

(77,811

)

Inventories

42,904

45,184

Prepaid expenses and other

(9,641

)

(3,516

)

Accounts payable and accrued liabilities

213,935

66,130

Pension contributions

(12,659

)

(1,324

)

Income taxes payable

17,121

19,109

Other

(857

)

(2,219

)

Net cash provided by operations

293,771

194,750

Cash provided by (used for) investment

Expenditures for property and equipment

(46,994

)

(53,249

)

Acquisitions of businesses and facilities

(15,676

)

Proceeds from sales of facilities

2,493

Proceeds from sales of assets and other

563

1,644

Net cash used for investment

(46,431

)

(64,788

)

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

(12,553

)

(11,070

)

Tax withholding payments on stock-based awards

(3,309

)

(3,575

)

Other

(784

)

(545

)

Net cash used for financing

(28,642

)

(15,190

)

Net increase in cash and cash equivalents

218,698

114,772

Balance at beginning of the period

285,237

191,671

Balance at end of the period

$

503,935

$

306,443

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 2019 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 September 30, 2020 and 2019, and June 30, 2020, and the nine months ended September 30, 2020 and 2019:

Three Months Ended

Nine Months Ended

September 30

June 30,

2020

September 30

2020

2019

2020

2019

(in thousands)

Net income

$

103,192

$

27,171

$

33,586

$

148,978

$

66,278

Interest expense

7,002

6,532

6,633

20,056

19,455

Interest income

(113

)

(837

)

(190

)

(958

)

(1,745

)

Income tax provision

34,633

9,650

11,334

49,974

22,601

Depreciation and amortization

20,029

20,969

19,899

75,260

59,640

EBITDA

164,743

63,485

71,262

293,310

166,229

Change in fair value of interest rate swaps

(147

)

569

514

2,681

3,103

Loss on extinguishment of debt

13,968

13,968

Adjusted EBITDA

$

178,564

$

64,054

$

71,776

$

309,959

$

169,332

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

Three Months Ended

Nine Months Ended

September 30

June 30,

2020

September 30

2020

2019

2020

2019

(in thousands)

Wood Products

Segment income

$

66,035

$

15,597

$

17,074

$

86,872

$

46,135

Depreciation and amortization

13,938

15,252

13,931

57,472

43,082

EBITDA

$

79,973

$

30,849

$

31,005

$

144,344

$

89,217

Building Materials Distribution

Segment income

$

107,901

$

38,665

$

43,210

$

180,413

$

89,982

Depreciation and amortization

5,686

5,278

5,584

16,614

15,438

EBITDA

$

113,587

$

43,943

$

48,794

$

197,027

$

105,420

Corporate

Unallocated corporate costs

$

(15,364

)

$

(9,364

)

$

(8,514

)

$

(31,396

)

$

(24,433

)

Foreign currency exchange gain (loss)

265

(200

)

409

(199

)

210

Pension expense (excluding service costs)

(302

)

(1,613

)

(302

)

(991

)

(2,202

)

Change in fair value of interest rate swaps

147

(569

)

(514

)

(2,681

)

(3,103

)

Loss on extinguishment of debt

(13,968

)

(13,968

)

Depreciation and amortization

405

439

384

1,174

1,120

EBITDA

(28,817

)

(11,307

)

(8,537

)

(48,061

)

(28,408

)

Change in fair value of interest rate swaps

(147

)

569

514

2,681

3,103

Loss on extinguishment of debt

13,968

13,968

Corporate adjusted EBITDA

$

(14,996

)

$

(10,738

)

$

(8,023

)

$

(31,412

)

$

(25,305

)

Total company adjusted EBITDA

$

178,564

$

64,054

$

71,776

$

309,959

$

169,332

View source version on businesswire.com: https://www.businesswire.com/news/home/20201030005681/en/

Contacts

Investor Relations Contact - Wayne Rancourt
208 384 6073

Media Contact - Lisa Tschampl
208 384 6552