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Mar 31, 2020
Boise Cascade Q1 2020 Earnings Report
Reported strong first quarter results despite COVID-19 uncertainties, with focus on associate safety and business continuity.
Key Takeaways
Boise Cascade reported a net income of $12.2 million, or $0.31 per share, on sales of $1.2 billion for the first quarter ended March 31, 2020. The results include pre-tax accelerated depreciation and other curtailment related costs of $15.0 million and $1.7 million respectively, due to the permanent curtailment of I-joist production at the Roxboro, North Carolina, facility.
First quarter net income was $12.2 million, or $0.31 per share.
Sales for the first quarter were $1.2 billion.
Wood Products sales increased slightly, driven by higher sales volumes for I-joists and LVL, offset by decreases in plywood sales prices and volumes.
Building Materials Distribution sales increased 16%, driven by a sales volume increase of 17%.
Boise Cascade
Boise Cascade
Boise Cascade Revenue by Segment
Revenue by Segment
Wood Products Revenue
CapyFin.comBuilding Materials Distribution Revenue
CapyFin.com Forward Guidance
The full impacts of the global emergence of COVID-19 on our business and financial results are currently unknown. Economists predict that housing starts will be negatively impacted compared to expectations prior to the COVID-19 outbreak.
Positive Outlook
- The U.S. Department of Homeland Security (DHS) has designated the forest products industry, and thereby wood products manufacturing and building materials distribution, as part of the Essential Critical Infrastructure Workforce.
- To date, we have not experienced disruptions to our supply chain and have been able to source the necessary raw materials and finished goods needed by our operations.
- Current U.S. demographics are supportive of higher levels of housing starts.
- Robust construction activity in the first two months of 2020 drove sharp increases in commodity products pricing that peaked in mid-March.
- Cash flows from operations, combined with current cash levels and available borrowing capacity, will be adequate to fund debt service requirements and provide cash, as required, to support ongoing operations
Challenges Ahead
- State and local agencies are not mandated to follow the DHS designations, and in certain geographies across the U.S., additional restrictions have been imposed that further limit or preclude residential construction activity.
- Given the current outlook and with sufficient inventory on hand, our Wood Products segment has implemented changes to reduce the volume of EWP and plywood it will produce.
- In April 2020, we temporarily curtailed or reduced operating schedules at essentially all of our manufacturing facilities, and we expect to continue temporary curtailment of certain operations until market conditions improve.
- 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.
- COVID-19 is expected to adversely affect the pace of household formation rates and residential repair-and-remodeling activity due to high unemployment rates, lower wages, low consumer confidence, prospective home buyers' lack of ability to view homes in person, prospective home buyers' access to and cost of financing, and housing affordability, as well as other factors.
Revenue & Expenses
Visualization of income flow from segment revenue to net income