Business Wire | Feb 22, 2021 04:05PM EST

Boise Cascade Company Reports Fourth Quarter and Full Year 2020 Results

Feb. 22, 2021

BOISE, Idaho--(BUSINESS WIRE)--Feb. 22, 2021--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 % 2020 2019 % change 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 incomeper common 0.66 0.37 78 % 4.44 2.06 116 %share -diluted

Adjusted 113,139 45,243 150 % 423,098 214,575 97 %EBITDA ^1

Segment Results

WoodProducts $ 358,661 $ 296,286 21 % $ 1,323,901 $ 1,275,167 4 %sales

WoodProducts 40,848 8,062 407 % 127,720 54,197 136 %income

WoodProducts 54,517 22,651 141 % 198,861 111,868 78 %EBITDA ^1

BuildingMaterials 1,330,078 986,969 35 % 4,952,018 4,137,719 20 %Distributionsales

BuildingMaterials 67,081 26,254 156 % 247,494 116,236 113 %Distributionincome

BuildingMaterials 72,927 31,585 131 % 269,954 137,005 97 %DistributionEBITDA ^1

^1 For reconciliations of non-GAAP measures, see summary notes at the end ofthis 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, December 31 2020 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, andotheroperating 1,233,182 939,375 1,261,697 4,536,051 3,965,776 expenses(excludingdepreciation)

Depreciationand 19,909 20,501 20,029 95,169 80,141 amortization

Selling anddistribution 102,366 98,280 122,884 428,279 390,739 expenses

General andadministrative 17,737 19,008 26,060 78,636 71,072 expenses

Loss oncurtailment of - - - 1,707 - facility

Other (income) (103 ) (226 ) 71 (33 ) (783 ) expense, net

1,373,091 1,076,938 1,430,741 5,139,809 4,506,945



Income from 99,140 24,775 158,572 335,029 136,459 operations



Foreigncurrency 556 239 265 357 449 exchange gain

Pensionexpense (6,466 ) (272 ) (302 ) (7,457 ) (2,474 ) (excludingservice costs)

Interest (6,167 ) (6,596 ) (7,002 ) (26,223 ) (26,051 ) expense

Interest 41 1,066 113 999 2,811 income

Change in fairvalue of 255 140 147 (2,426 ) (2,963 ) interest rateswaps

Loss onextinguishment - - (13,968 ) (13,968 ) - of debt

(11,781 ) (5,423 ) (20,747 ) (48,718 ) (28,228 )



Income before 87,359 19,352 137,825 286,311 108,231 income taxes

Income tax (61,358 ) (4,705 ) (34,633 ) (111,332 ) (27,306 ) provision

Net income $ 26,001 $ 14,647 $ 103,192 $ 174,979 $ 80,925



Weightedaverage common sharesoutstanding:

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



Dividendsdeclared per $ 0.10 $ 1.10 $ 1.70 $ 2.00 $ 1.37 common share

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 December 31 30, 2020 2019 2020 2020 2019



Segment sales $ 358,661 $ 296,286 $ 363,674 $ 1,323,901 $ 1,275,167



Costs and expenses

Materials,labor, andotheroperating 292,425 261,611 268,930 1,075,015 1,117,540 expenses(excludingdepreciation)

Depreciationand 13,669 14,589 13,938 71,141 57,671 amortization

Selling anddistribution 8,147 8,201 9,684 33,367 31,485 expenses

General andadministrative 3,508 3,962 5,084 15,055 14,442 expenses

Loss oncurtailment of - - - 1,707 - facility

Other (income) 64 (139 ) 3 (104 ) (168 ) expense, net

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, andotheroperating 81.5 % 88.3 % 73.9 % 81.2 % 87.6 %expenses(excludingdepreciation)

Depreciationand 3.8 % 4.9 % 3.8 % 5.4 % 4.5 %amortization

Selling anddistribution 2.3 % 2.8 % 2.7 % 2.5 % 2.5 %expenses

General andadministrative 1.0 % 1.3 % 1.4 % 1.1 % 1.1 %expenses

Loss oncurtailment of - % - % - % 0.1 % - %facility

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

%

Building Materials Distribution Segment

Statements of Operations

(in thousands, except percentages)

Three Months Ended Year Ended

December 31 September 30, December 31 2020 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, andotheroperating 1,156,836 859,102 1,201,722 4,258,784 3,617,477 expenses(excludingdepreciation)

Depreciationand 5,846 5,331 5,686 22,460 20,769 amortization

Selling anddistribution 94,162 90,027 113,146 394,689 359,039 expenses

General andadministrative 6,322 6,365 9,282 28,945 24,785 expenses

Other (income) (169 ) (110 ) (54 ) (354 ) (587 ) expense, net

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, andotheroperating 87.0 % 87.0 % 83.6 % 86.0 % 87.4 %expenses(excludingdepreciation)

Depreciationand 0.4 % 0.5 % 0.4 % 0.5 % 0.5 %amortization

Selling anddistribution 7.1 % 9.1 % 7.9 % 8.0 % 8.7 %expenses

General andadministrative 0.5 % 0.6 % 0.6 % 0.6 % 0.6 %expenses

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.

Segment Information

(in thousands)

Three Months Ended Year Ended

December 31 September 30, December 31 2020 2020 2019 2020 2019

Segment sales

Wood Products $ 358,661 $ 296,286 $ 363,674 $ 1,323,901 $ 1,275,167

BuildingMaterials 1,330,078 986,969 1,437,683 4,952,018 4,137,719 Distribution

Intersegment (216,508 ) (181,542 ) (212,044 ) (801,081 ) (769,482 ) eliminations

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

BuildingMaterials 67,081 26,254 107,901 247,494 116,236 Distribution

Total segment 107,929 34,316 173,936 375,214 170,433 income

Unallocated (8,789 ) (9,541 ) (15,364 ) (40,185 ) (33,974 ) corporate costs

Income from $ 99,140 $ 24,775 $ 158,572 $ 335,029 $ 136,459 operations



Segment EBITDA (a)

Wood Products $ 54,517 $ 22,651 $ 79,973 $ 198,861 $ 111,868

BuildingMaterials 72,927 31,585 113,587 269,954 137,005 Distribution

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 Balance Sheets (continued)

(in thousands, except per-share data)

December 31, December 31, 2020 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 56,001 58,029 portion

Finance lease liabilities, net of current 31,607 23,419 portion

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 44,353 446 444 shares issued, respectively

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.

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 97,131 82,377 financing costs and other

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 1,476 - severance)

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 400,000 5,500 credit facility

Payments of long-term debt, including revolving (405,774 ) (5,500 ) credit facility

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.

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(a) 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, December 31 2020 2020 2019 2020 2019

(in thousands)

Net income $ 26,001 $ 14,647 $ 103,192 $ 174,979 $ 80,925

Interest 6,167 6,596 7,002 26,223 26,051 expense

Interest (41 ) (1,066 ) (113 ) (999 ) (2,811 ) income

Income tax 61,358 4,705 34,633 111,332 27,306 provision

Depreciationand 19,909 20,501 20,029 95,169 80,141 amortization

EBITDA 113,394 45,383 164,743 406,704 211,612

Change in fairvalue of (255 ) (140 ) (147 ) 2,426 2,963 interest rate swaps

Loss onextinguishment - - 13,968 13,968 - of debt

Adjusted $ 113,139 $ 45,243 $ 178,564 $ 423,098 $ 214,575 EBITDA

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, December 31 2020 2020 2019 2020 2019

(in thousands)

Wood Products

Segment income $ 40,848 $ 8,062 $ 66,035 $ 127,720 $ 54,197

Depreciationand 13,669 14,589 13,938 71,141 57,671 amortization

EBITDA $ 54,517 $ 22,651 $ 79,973 $ 198,861 $ 111,868



BuildingMaterials Distribution

Segment income $ 67,081 $ 26,254 $ 107,901 $ 247,494 $ 116,236

Depreciationand 5,846 5,331 5,686 22,460 20,769 amortization

EBITDA $ 72,927 $ 31,585 $ 113,587 $ 269,954 $ 137,005



Corporate

Unallocatedcorporate $ (8,789 ) $ (9,541 ) $ (15,364 ) $ (40,185 ) $ (33,974 ) costs

Foreigncurrency 556 239 265 357 449 exchange gain

Pensionexpense (6,466 ) (272 ) (302 ) (7,457 ) (2,474 ) (excluding service costs)

Change in fairvalue of 255 140 147 (2,426 ) (2,963 ) interest rate swaps

Loss onextinguishment - - (13,968 ) (13,968 ) - of debt

Depreciationand 394 581 405 1,568 1,701 amortization

EBITDA (14,050 ) (8,853 ) (28,817 ) (62,111 ) (37,261 )

Change in fairvalue of (255 ) (140 ) (147 ) 2,426 2,963 interest rate swaps

Loss onextinguishment - - 13,968 13,968 - of debt

Corporateadjusted $ (14,305 ) $ (8,993 ) $ (14,996 ) $ (45,717 ) $ (34,298 ) EBITDA



Total companyadjusted $ 113,139 $ 45,243 $ 178,564 $ 423,098 $ 214,575 EBITDA

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CONTACT: Investor Relations Contact - Wayne Rancourt 208-384-6073 Media Contact - Lisa Tschampl 208-384-6552