Boise Cascade Q2 2020 Earnings Report
Key Takeaways
Boise Cascade Company reported net income of $33.6 million, or $0.85 per share, on sales of $1.2 billion for the second quarter ended June 30, 2020. Both Wood Products and Building Materials Distribution delivered strong financial results.
Wood Products' focus on manufacturing cost improvements was notable given production curtailments and modifications.
BMD's sales and income were robust, driven by a long-term strategy and commitment to carrying a broad base of in-stock products.
BMD benefited from strong warehouse sales and demand from home center customers due to COVID-19 related uncertainties and elevated commodity product prices.
The company ended the quarter with $361.4 million of cash and cash equivalents and $345.4 million of undrawn committed bank line availability.
Boise Cascade
Boise Cascade
Boise Cascade Revenue by Segment
Forward Guidance
The company expects activity levels across its distribution network to continue to vary widely as COVID-19 impacts geographies across the U.S. to differing degrees. Commodity products pricing in the third quarter of 2020 will be subject to price volatility.
Positive Outlook
- Wood Products is in the process of attempting to restore production rates to pre-COVID-19 levels in response to strong end-product demand.
- The pandemic may improve the demand for single-family residential construction as homeowners consider a transition to less densely populated geographies.
- Repair and remodel spending may continue to strengthen as homeowners invest in existing homes.
- Order files at the manufacturing level have extended.
- Composite lumber and panel prices at the end of the second quarter were 30-40% above price realizations early in the quarter.
Challenges Ahead
- Wood Products continues to experience periodic short-term disruptions at many locations due to COVID-19.
- Activity levels across distribution network to continue to vary widely as COVID-19 impacts geographies across the U.S. to differing degrees.
- 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 and reduced consumer confidence.
- Prospective home buyers' lack of ability to view homes in person.
- Homebuyers' access to and cost of financing, and housing affordability.
Revenue & Expenses
Visualization of income flow from segment revenue to net income