Boise Cascade Company Reports First Quarter 2022 Results

Boise Cascade Company (“Boise Cascade,” the “Company,” “we,” or “our”) today reported net income of $302.6 million, or $7.61 per share, on sales of $2.3 billion for the first quarter ended March 31, 2022, compared with net income of $149.2 million, or $3.76 per share, on sales of $1.8 billion for the first quarter ended March 31, 2021.

“Both businesses delivered tremendous financial results in the first quarter. I am very thankful for our associates and their continued focus on providing exceptional service to our customer and supplier partners,” commented Nate Jorgensen, CEO. “As we move into second quarter, we continue to experience steady demand across product lines and strong pricing on engineered wood and general line products. Our team has also done a great job of mitigating exposure to commodity price declines experienced early in the quarter. With the strength of our balance sheet we are intent on deploying capital to create shareholder value, including execution of our growth strategies.”

First Quarter 2022 Highlights

		1Q 2022			1Q 2021			% change
		(in thousands, except per-share data and percentages)
Consolidated Results
Sales		$	2,326,282		$	1,821,316		28%
Net income			302,600			149,156		103%
Net income per common share – diluted			7.61			3.76		102%
Adjusted EBITDA 1			426,132			224,935		89%
Segment Results
Wood Products sales		$	558,944		$	432,335		29%
Wood Products income			190,116			97,052		96%
Wood Products EBITDA 1			203,756			110,398		85%
Building Materials Distribution sales			2,111,833			1,634,777		29%
Building Materials Distribution income			225,892			120,219		88%
Building Materials Distribution EBITDA 1			232,468			126,038		84%

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

In the first quarter 2022, total U.S. housing starts increased 10% compared to the same period in 2021. Single-family housing starts, the key demand driver for our sales, also increased 4%.1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.

Wood Products

Wood Products’ sales, including sales to Building Materials Distribution (BMD), increased $126.6 million, or 29%, to $558.9 million for the three months ended March 31, 2022, from $432.3 million for the three months ended March 31, 2021. The increase in sales was driven primarily by higher net sales prices for I-joists and LVL (collectively referred to as EWP) and plywood, as well as higher sales volumes for plywood and LVL. These increases were offset partially by lower sales volumes for I-joists.

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

		1Q 2022 vs. 1Q 2021		1Q 2022 vs. 4Q 2021
Average Net Selling Prices
LVL		39%		2%
I-joists		42%		3%
Plywood		24%		72%
Sales Volumes
LVL		6%		3%
I-joists		(9)%		(2)%
Plywood		4%		4%

Wood Products’ segment income increased $93.1 million to $190.1 million for the three months ended March 31, 2022, from $97.1 million for the three months ended March 31, 2021. The increase in segment income was due primarily to higher EWP and plywood sales prices. These improvements were offset partially by higher wood fiber costs and other manufacturing costs.

Building Materials Distribution

BMD’s sales increased $477.1 million, or 29%, to $2,111.8 million for the three months ended March 31, 2022, from $1,634.8 million for the three months ended March 31, 2021. Compared with the same quarter in the prior year, the overall increase in sales was driven by sales price increases of 29%, as sales volumes were flat. By product line, commodity sales increased 22%, general line product sales increased 30%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 54%.

BMD segment income increased $105.7 million to $225.9 million for the three months ended March 31, 2022, from $120.2 million in the comparative prior year quarter. The improvement in segment income was driven by a gross margin increase of $133.6 million, resulting from improved gross margins across substantially all product lines compared with first quarter 2021. The margin improvement was offset partially by increased selling and distribution expenses of $25.5 million.

Balance Sheet and Liquidity

Boise Cascade ended first quarter 2022 with $922.7 million of cash and cash equivalents and $346.0 million of undrawn committed bank line availability, for total available liquidity of $1,268.7 million. The Company had $444.8 million of outstanding debt at March 31, 2022.

We expect capital expenditures in 2022 to total approximately $110 million to $130 million. Our 2022 capital expenditures range includes funding to complete our BMD organic expansions in Ohio, Kentucky, and Minnesota, and a new dryer at our Chester, South Carolina, veneer and plywood plant. This level of capital expenditures could increase or decrease as a result of a number of factors, including acquisitions, efforts to further accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, availability of engineering and construction resources, and timing and availability of equipment purchases.

Dividends

On May 5, 2022, our board of directors declared a quarterly dividend of $0.12 per share on our common stock, as well as a supplemental dividend of $2.50 per share on our common stock, both payable on June 15, 2022, to stockholders of record on June 1, 2022.

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, material cash requirements, restrictions imposed by our asset-based credit facility and the indenture governing our senior notes, applicable laws, and other factors that our board of directors may deem relevant.

Outlook

Demand for the products we manufacture, as well as the products we purchase and distribute, is correlated with new residential construction, residential repair-and-remodeling activity and light commercial construction. Current demographics in the United States (U.S.), as well as continuation of work-from-home practices by many in the economy, continue to create a favorable demand environment for new residential construction. We expect demand to remain strong during 2022, with April 2022 Blue Chip Economic Indicators consensus forecasts for 2022 single- and multi-family housing starts in the U.S. of 1.65 million units compared with actual housing starts of 1.60 million in 2021, as reported by the U.S. Census Bureau. In addition, limited new and existing home inventory availability and the age of the U.S. housing stock will continue to provide a favorable backdrop for residential construction and repair-and-remodel spending. Although we believe that current U.S. demographics support the forecasted level of housing starts, and many national home builders are reporting strong near-term backlogs, labor shortages and supply induced constraints on residential construction activity may continue to extend build times and limit activity. In addition, the pace of residential construction and repair-and-remodeling activity may be affected by the economic impact of the cost of building materials and construction, housing affordability, increasing mortgage interest rates, wage growth, prospective home buyers’ access to financing, and consumer confidence, as well as other factors.

As a manufacturer of certain commodity products, we have sales and profitability exposure to declines in commodity product prices and rising input costs. Our distribution business purchases and resells a broad mix of commodity products with periods of increasing prices providing the opportunity for higher sales and increased margins, while declining price environments expose us to declines in sales and profitability. Our first quarter 2022 financial results were favorably impacted by higher commodity wood products pricing compared to pricing in the same period last year, as well as rising prices for EWP and general line products. Current composite panel and lumber prices have declined by approximately 24% and 15% from levels at the end of first quarter 2022. We expect future commodity product pricing and commodity input costs to be volatile in response to capacity restoration and industry operating rates, transportation constraints or disruptions, net import and export activity, inventory levels in various distribution channels, and seasonal demand patterns. EWP and general line products have historically experienced limited price volatility, and we expect the firm pricing environment to continue during 2022.

For the complete press release, click here.

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.

Contact:

Kelly Hibbs – Investor Relations – (208) 384-3638

Source: Boise Cascade Company