Boise Cascade Reports 22% Increase in Q3 Sales
Friday, October 26, 2012
Press release from the issuing company
BOISE, Idaho - Boise Cascade Holdings, L.L.C. (Boise Cascade or Company) announced third quarter 2012 net income of $23.5 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $36.8 million. Year-to-date net income and EBITDA results of $40.2 million and $79.6 million, respectively, reflect a significant improvement over a net loss of $32.6 million and EBITDA of $8.9 million reported in the first nine months of 2011. Sales in third quarter 2012 were $764.6 million, a 22% increase over the same quarter a year ago. Third quarter 2011 reported net loss and EBITDA were $3.7 million and $10.6 million, respectively. Second quarter 2012 net income and EBITDA were $15.0 million and $28.2 million, respectively.
The Company generated $50.3 million of cash during the third quarter 2012 driven by improved operating results and working capital reductions. At September 30, 2012, Boise Cascade had total available liquidity of $483.8 million, with $224.4 million in cash and committed bank line availability of $259.4 million. On October 15, we redeemed $75 million of our 7 1/8% senior subordinated notes at par value. On October 22, the Company issued $250 million of 6 3/8% senior unsecured notes due November 1, 2020. The net proceeds from the offering were used to repay the remaining $144.6 million of our 7 1/8% senior subordinated notes and enhance our cash position by nearly $100 million.
U.S. housing starts increased approximately 28% in third quarter 2012 from the levels experienced in third quarter 2011. Housing start levels remain significantly below the last 10 year historical average of approximately 1.3 million units per year. Blue Chip consensus forecast for U.S. housing starts for 2012 was 760,000 as of October 10, 2012. The final U.S. housing starts level reported for 2011 was 609,000.
"We experienced a third consecutive quarter of sequentially improved income from operations, resulting in $50 million of cash generated and $37 million of EBITDA in the third quarter, underscored by strong plywood prices. The cash generated, together with our recently completed debt refinancing, has strengthened our liquidity position and allows us greater flexibility to take advantage of improvement in the markets and of business opportunities," stated Tom Carlile, CEO. "We are encouraged by the improved operating environment and remain cautiously optimistic the recent improvement in demand for our products will carry into 2013."
Building Materials Distribution (BMD) segment sales were $605.2 million in third quarter 2012, up 21% from the same quarter a year ago. Volumes for the segment were up approximately 8%, with prices up about 13%. In third quarter 2012, BMD reported $12.6 million of EBITDA compared to $8.2 million in third quarter 2011 and $10.9 million in second quarter 2012.
Wood Products segment sales in the third quarter 2012 were $259.8 million, up 33% from the same quarter a year ago. The increase in sales was due primarily to higher plywood volumes and prices and increased EWP shipments, offset in part by lower EWP sales price realizations. In third quarter 2012, Wood Products reported $28.6 million of EBITDA compared to $7.1 million in third quarter 2011 and $21.7 million in second quarter 2012.
The housing industry is showing signs of improvement in many areas within the U.S.; however, we expect to continue to experience below historical demand for the products we distribute and manufacture. Favorable commodity wood product prices experienced year to date began to decline mid-September 2012 and could be volatile in response to operating rates and inventory levels in various distribution channels. We expect to manage our production levels to our sales demand, which will likely result in us operating some of our facilities below their capacity.
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