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Boise Cascade Company Reports Third Quarter 2019 Net Income of $27.2 Million on Sales of $1.3 Billion

/EIN News/ -- Boise, Idaho, Nov. 07, 2019 (GLOBE NEWSWIRE) -- Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported net income of $27.2 million, or $0.69 per share, on sales of $1.3 billion for the third quarter ended September 30, 2019, compared with net income of $13.8 million, or $0.35 per share, on sales of $1.3 billion for the third quarter ended September 30, 2018. Third quarter 2019 results include $1.0 million of after-tax losses, or $0.03 per share, from a non-cash pension settlement charge. Third quarter 2018 results included $16.7 million of net after-tax losses, or $0.42 per share, from a non-cash pension settlement charge and impairment and sale related losses. These charges also negatively impacted reported EBITDA and adjusted EBITDA, as discussed below.

Third Quarter 2019 Highlights

    3Q 2019   3Q 2018   % change
             
    (in thousands, except per-share data and percentages)
             
Consolidated Results            
Sales   $ 1,269,524     $ 1,338,512     (5 )%
Net income   27,171     13,848     96 %
Net income per common share - diluted   0.69     0.35     97 %
Adjusted EBITDA 1   64,054     42,721     50 %
             
Segment Results            
Wood Products sales   $ 325,102     $ 402,672     (19 )%
Wood Products income   15,597     13,929     12 %
Wood Products EBITDA 1   30,849     32,656     (6 )%
             
Building Materials Distribution sales   1,145,621     1,159,304     (1 )%
Building Materials Distribution income   38,665     23,504     65 %
Building Materials Distribution EBITDA 1   43,943     28,259     56 %

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

            In the third quarter 2019, total U.S. housing starts increased 4% compared to the same period last year. Single-family starts, the primary driver of our sales, also increased 4%, while multi-family starts increased 5%. On a year-to-date basis through September 2019, total and single-family housing starts decreased 1% and 2%, respectively, from the same period in 2018.

            “Despite the lack of growth in residential construction and ongoing weakness in commodity wood products pricing that has persisted this year, both of our businesses continue to execute well. BMD delivered outstanding financial results during the third quarter, with solid growth in general line product sales and gross margins. With the operating footprint changes made during the last year, our favorable performance in EWP is more evident in Wood Products' results. The stability of EWP, together with input cost improvements, mitigated the overall earnings impact of the significant year-over-year decline in plywood pricing,” commented Tom Corrick, CEO. “Our operating results have positioned us to comfortably fund our bolt-on acquisitions and internal growth initiatives while strengthening our balance sheet. As part of our capital allocation process, I am pleased our board approved an 11% increase in our regular quarterly dividend to $0.10 per share, as well as a supplemental dividend of $1.00 per share, both payable in December. This is consistent with our objective of generating favorable returns on our shareholders’ invested capital. We remain well positioned to fund anticipated working capital needs in early 2020, as well as having flexibility to take advantage of internal growth initiatives and acquisition opportunities which may occur in the next six to nine months.”

Wood Products

            Wood Products sales, including sales to Building Materials Distribution (BMD), decreased $77.6 million, or 19%, to $325.1 million for the three months ended September 30, 2019, from $402.7 million for the three months ended September 30, 2018. The decline in sales was driven primarily by lower sales prices and sales volumes for plywood. The lower sales volume for plywood was mostly due to weaker market conditions and downtime for facility capital improvements, as well as the sale of the Moncure plywood facility on March 1, 2019. The decrease in sales was also attributable to lower sales volumes of lumber and particleboard due to the sale or closure of three lumber mills and our particleboard plant during 2018. Approximately one-third of the decrease in Wood Products sales is attributable to these facility sales or closures. These decreases were offset partially by increases in sales volumes and net sale prices for LVL.

            Wood Products segment income increased $1.7 million to $15.6 million for the three months ended September 30, 2019, from $13.9 million for the three months ended September 30, 2018. Third quarter 2018 results included impairment and sales related losses of $11.0 million (Impairment Loss). Excluding the Impairment Loss, segment income decreased due to lower sales prices of plywood, offset partially by lower costs of OSB (used in the manufacture of I-joists) and logs, as well as lower employee-related expenses. In addition, depreciation and amortization expense decreased due primarily to discontinued depreciation on manufacturing facilities curtailed and sold in the last 12 months.

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

    3Q 2019 vs. 3Q 2018   3Q 2019 vs. 2Q 2019
         
 Average Net Selling Prices        
  LVL   1 %   (1 )%
  I-joists   1 %   (1 )%
  Plywood   (29 )%   (7 )%
 Sales Volumes        
  LVL   4 %   1 %
  I-joists   (2 )%   (1 )%
  Plywood   (7 )%   %

Building Materials Distribution

            BMD's sales decreased $13.7 million, or 1%, to $1,145.6 million for the three months ended September 30, 2019, from $1,159.3 million for the three months ended September 30, 2018. Compared with the same quarter in the prior year, the overall decrease in sales was driven by a sales price decrease of 11%, offset partially by a sales volume increase of 10%. Excluding the impact of the acquisition of wholesale building material distribution locations in Nashville, Tennessee, Medford, Oregon, and Cincinnati, Ohio during 2018, and the Birmingham, Alabama acquisition in 2019, BMD sales would have decreased 4%. By product line, commodity sales decreased 16%, general line product sales increased 18%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 2%.

            BMD segment income increased $15.2 million to $38.7 million for the three months ended September 30, 2019, from $23.5 million in the comparative prior year quarter. The improvement in segment income was driven primarily by a gross margin increase of $30.3 million, resulting from improved gross margins on commodity products and higher sales of general line products compared with third quarter 2018. Gross margins on commodity products in the prior year quarter were negatively impacted by sharply falling prices. The increase in gross margin during third quarter 2019 was offset partially by increased selling and distribution expenses of $13.3 million.
           
Balance Sheet

            Boise Cascade ended third quarter 2019 with $306.4 million of cash and cash equivalents and $365.4 million of undrawn committed bank line availability, for total available liquidity of $671.8 million. The Company had $440.3 million of outstanding debt at September 30, 2019.

            On September 30, 2019, Boise Cascade transferred $19.8 million of its qualified defined benefit pension plan (Pension Plan) assets to The Prudential Insurance Company of America (Prudential) for the purchase of a group annuity contract. Under the arrangement, Prudential assumed ongoing responsibility for administration and benefit payments for approximately 10% of Boise Cascade’s U.S. qualified pension plan projected benefit obligations. As a result of the transfer of pension plan assets, we recorded settlement expense of $1.3 million in third quarter 2019. We also recognized a non-cash pension settlement charge of $11.3 million in third quarter 2018 under a similar transaction in which we transferred $124.8 million of our Pension Plan assets to Prudential.

            We adopted the new lease accounting standard on January 1, 2019. The most significant impact of the adoption was the recognition of right-of-use assets and lease liabilities for operating leases, as reflected on the face of our balance sheet as of September 30, 2019. The standard did not have a material impact on our consolidated net earnings and cash flows. For additional information on the impact of this standard on our accounting for leases and additional required qualitative disclosures of our lease policies, see our Form 10-Q for the quarterly period ended September 30, 2019, filed with the Securities and Exchange Commission.

Dividends
           
            On October 30, 2019, our board of directors declared a quarterly dividend of $0.10 per share, as well as a supplemental dividend of $1.00 per share, on our common stock payable on December 16, 2019, to stockholders of record on December 2, 2019.

Outlook
           
            We expect to experience seasonally slower demand growth for the products we manufacture and distribute in fourth quarter 2019. The October 2019 Blue Chip consensus forecast for 2019 and 2020 reflects 1.25 million and 1.27 million total U.S. housing starts, respectively, compared with actual housing starts of 1.25 million in 2018. Although we believe U.S. demographics are supportive of higher levels of housing starts, we expect near-term residential construction growth to be flat to slightly down due to constraints faced by builders, such as availability of labor and building lots, as well as affordability constraints faced by prospective buyers. The pace of household formation rates and residential repair-and-remodeling activity will be affected by employment growth, wage growth, prospective home buyers' access to and cost of financing, housing affordability, and consumer confidence, as well as other factors. Household formation rates in turn will be a key factor behind the demand for new construction. In addition, the size of new single-family residences as well as the mix of single and multi-family starts will influence product consumption. We will continue to manage our production levels to our sales demand. As in past years, we plan to take scheduled capital and maintenance-related downtime at certain plywood facilities during the fourth quarter.

            Weak commodity products pricing experienced in the first half of 2019 continued throughout third quarter 2019 as weaker year-to-date residential construction activity and additional industry capacity brought on in 2018 have led to supply and demand imbalances. Commodity product pricing during the remainder of 2019 and into 2020 will be a key driver of our financial results and will be dependent on industry operating rates, net import and export activity, transportation constraints or disruptions, inventory levels in various distribution channels, and seasonal demand patterns. We anticipate that commodity products pricing in the fourth quarter of 2019 will remain at low absolute, although more stable, levels compared to fourth quarter 2018.

            We expect our capital spending, excluding acquisitions, to be $85-$95 million in 2019, including spending to improve the efficiency of our veneer production at our Chester, South Carolina, and Florien, Louisiana, facilities. In addition, we expect our capital spending, excluding acquisitions, to also be $85-$95 million in 2020.
           
            We expect fourth quarter 2019 financial results to be improved compared with fourth quarter 2018. Included in Wood Products fourth quarter 2018 results were certain items that negatively affected reported earnings. These items include $24.0 million of pre-tax impairment and sale related losses related to the sale of our hardwood plywood facility in Moncure, North Carolina, and $55.0 million and $2.8 million, respectively, of pre-tax accelerated depreciation and other curtailment related costs due to the permanent curtailment of LVL production at our Roxboro, North Carolina, facility.
           
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 on Thursday, November 7, at 11 a.m. Eastern, to review the Company's third quarter results.

            You can join the webcast through the Company's website by going to www.bc.com and clicking on the Event Calendar link under the Investor Relations heading. Please go to the website at least 15 minutes before the start of the webcast to register. To join the conference call, dial 844-795-4410 (international callers should dial 661-378-9637), participant passcode 2990498, at least 10 minutes before the start of the call.

            The archived webcast will be available in the Investor Relations section of the Company's website. A replay of the conference call will be available from Thursday, November 7, at 2 p.m. Eastern through Thursday, November 14, at 2 p.m. Eastern. Replay numbers are 855-859-2056 for U.S. callers and 404-537-3406 for international callers, and the passcode will be 2990498.

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 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.

            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, income 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 or segment income 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, 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   Nine Months Ended
  September 30   June 30,
 2019
  September 30
  2019   2018     2019   2018
                   
Sales $ 1,269,524     $ 1,338,512     $ 1,230,081     $ 3,541,691     $ 3,929,485  
                   
Costs and expenses                  
Materials, labor, and other operating expenses (excluding depreciation) 1,078,924     1,163,020     1,049,655     3,026,401     3,366,716  
Depreciation and amortization 20,969     23,881     19,454     59,640     70,288  
Selling and distribution expenses 106,567     93,395     98,866     292,459     273,592  
General and administrative expenses 18,603     16,891     16,786     52,064     52,754  
Other (income) expense, net (437 )   10,870     188     (557 )   9,820  
  1,224,626     1,308,057     1,184,949     3,430,007     3,773,170  
                   
Income from operations 44,898     30,455     45,132     111,684     156,315  
                   
Foreign currency exchange gain (loss) (200 )   163     248     210     (272 )
Pension expense (excluding service costs) (1,613 )   (11,778 )   (290 )   (2,202 )   (24,402 )
Interest expense (6,532 )   (6,585 )   (6,486 )   (19,455 )   (19,527 )
Interest income 837     500     416     1,745     1,001  
Change in fair value of interest rate swaps (569 )   279     (1,551 )   (3,103 )   2,419  
  (8,077 )   (17,421 )   (7,663 )   (22,805 )   (40,781 )
                   
Income before income taxes 36,821     13,034     37,469     88,879     115,534  
Income tax (provision) benefit (9,650 )   814     (9,751 )   (22,601 )   (22,811 )
Net income $ 27,171     $ 13,848     $ 27,718     $ 66,278     $ 92,723  
                   
Weighted average common shares outstanding:                  
  Basic 39,087     38,998     39,087     39,020     38,920  
  Diluted 39,292     39,461     39,199     39,202     39,397  
                   
Net income per common share:                  
  Basic $ 0.70     $ 0.36     $ 0.71     $ 1.70     $ 2.38  
  Diluted $ 0.69     $ 0.35     $ 0.71     $ 1.69     $ 2.35  
                   
Dividends declared per common share $ 0.09     $ 1.07     $ 0.09     $ 0.27     $ 1.21  

See accompanying summary notes to consolidated financial statements and segment information.

Wood Products Segment
Statements of Operations
(in thousands, except percentages)

  Three Months Ended   Nine Months Ended
  September 30   June 30,
 2019
  September 30
  2019   2018     2019   2018
                   
Segment sales $ 325,102     $ 402,672     $ 334,256     $ 978,881     $ 1,226,146  
                   
Costs and expenses                  
Materials, labor, and other operating expenses (excluding depreciation) 283,354     346,361     289,545     855,929     1,045,217  
Depreciation and amortization 15,252     18,727     14,092     43,082     55,724  
Selling and distribution expenses 7,718     7,809     7,861     23,284     25,304  
General and administrative expenses 3,379     5,031     3,473     10,480     13,401  
Other (income) expense, net (198 )   10,815     377     (29 )   9,968  
  309,505     388,743     315,348     932,746     1,149,614  
                   
Segment income $ 15,597     $ 13,929     $ 18,908     $ 46,135     $ 76,532  
                   
  (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) 87.2 %   86.0 %   86.6 %   87.4 %   85.2 %
Depreciation and amortization 4.7 %   4.7 %   4.2 %   4.4 %   4.5 %
Selling and distribution expenses 2.4 %   1.9 %   2.4 %   2.4 %   2.1 %
General and administrative expenses 1.0 %   1.2 %   1.0 %   1.1 %   1.1 %
Other (income) expense, net (0.1 )%   2.7 %   0.1 %   %   0.8 %
  95.2 %   96.5 %   94.3 %   95.3 %   93.8 %
                   
Segment income 4.8 %   3.5 %   5.7 %   4.7 %   6.2 %

Building Materials Distribution Segment
Statements of Operations
(in thousands, except percentages)

  Three Months Ended   Nine Months Ended
  September 30   June 30,
 2019
  September 30
  2019   2018     2019   2018
                   
Segment sales $ 1,145,621     $ 1,159,304     $ 1,097,421     $ 3,150,750     $ 3,365,468  
                   
Costs and expenses                  
Materials, labor, and other operating expenses (excluding depreciation) 996,313     1,040,342     961,862     2,758,375     2,982,793  
Depreciation and amortization 5,278     4,755     5,028     15,438     13,374  
Selling and distribution expenses 98,797     85,520     90,950     269,012     248,095  
General and administrative expenses 6,759     5,128     5,967     18,420     17,745  
Other (income) expense, net (191 )   55     (186 )   (477 )   (144 )
  1,106,956     1,135,800     1,063,621     3,060,768     3,261,863  
                   
Segment income $ 38,665     $ 23,504     $ 33,800     $ 89,982     $ 103,605  
                   
  (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 %   89.7 %   87.6 %   87.5 %   88.6 %
Depreciation and amortization 0.5 %   0.4 %   0.5 %   0.5 %   0.4 %
Selling and distribution expenses 8.6 %   7.4 %   8.3 %   8.5 %   7.4 %
General and administrative expenses 0.6 %   0.4 %   0.5 %   0.6 %   0.5 %
Other (income) expense, net %   %   %   %   %
  96.6 %   98.0 %   96.9 %   97.1 %   96.9 %
                   
Segment income 3.4 %   2.0 %   3.1 %   2.9 %   3.1 %

Segment Information
(in thousands)

  Three Months Ended   Nine Months Ended
  September 30   June 30,
 2019
  September 30
  2019   2018     2019   2018
Segment sales                  
Wood Products $ 325,102     $ 402,672     $ 334,256     $ 978,881     $ 1,226,146  
Building Materials Distribution 1,145,621     1,159,304     1,097,421     3,150,750     3,365,468  
Intersegment eliminations and other (201,199 )   (223,464 )   (201,596 )   (587,940 )   (662,129 )
Total net sales $ 1,269,524     $ 1,338,512     $ 1,230,081     $ 3,541,691     $ 3,929,485  
                   
Segment income                  
Wood Products $ 15,597     $ 13,929     $ 18,908     $ 46,135     $ 76,532  
Building Materials Distribution 38,665     23,504     33,800     89,982     103,605  
Total segment income 54,262     37,433     52,708     136,117     180,137  
Unallocated corporate (9,364 )   (6,978 )   (7,576 )   (24,433 )   (23,822 )
Income from operations $ 44,898     $ 30,455     $ 45,132     $ 111,684     $ 156,315  
                   
Segment EBITDA (a)                  
Wood Products $ 30,849     $ 32,656     $ 33,000     $ 89,217     $ 132,256  
Building Materials Distribution 43,943     28,259     38,828     105,420     116,979  

See accompanying summary notes to consolidated financial statements and segment information.

Boise Cascade Company
Consolidated Balance Sheets
(in thousands)

  September 30, 2019   December 31, 2018
   
ASSETS      
       
Current      
Cash and cash equivalents $ 306,443     $ 191,671  
Receivables      
Trade, less allowances of $1,087 and $1,062 295,585     214,338  
Related parties 630     436  
Other 15,728     14,466  
Inventories 492,588     533,049  
Prepaid expenses and other 14,156     31,818  
Total current assets 1,125,130     985,778  
       
Property and equipment, net 464,373     487,224  
Operating lease right-of-use assets 65,571      
Finance lease right-of-use assets 22,238      
Timber deposits 14,043     12,568  
Goodwill 60,382     59,159  
Intangible assets, net 18,103     16,851  
Deferred income taxes 7,962     8,211  
Other assets 8,121     11,457  
Total assets $ 1,785,923     $ 1,581,248  

Boise Cascade Company
Consolidated Balance Sheets (continued)
(in thousands, except per-share data)

  September 30, 2019   December 31, 2018
   
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
Current      
Accounts payable      
Trade $ 286,704     $ 210,587  
Related parties 2,349     1,070  
Accrued liabilities      
Compensation and benefits 72,901     87,911  
Interest payable 1,800     6,748  
Other 80,996     63,509  
Total current liabilities 444,750     369,825  
       
Debt      
Long-term debt 440,265     439,428  
       
Other      
Compensation and benefits 44,120     41,283  
Operating lease liabilities, net of current portion 59,591      
Finance lease liabilities, net of current portion 23,661      
Deferred income taxes 29,038     19,218  
Other long-term liabilities 12,932     38,904  
  169,342     99,405  
       
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, 44,343 and 44,076 shares issued, respectively 443     441  
Treasury stock 5,367 shares at cost (138,909 )   (138,909 )
Additional paid-in capital 531,119     528,654  
Accumulated other comprehensive loss (46,748 )   (47,652 )
Retained earnings 385,661     330,056  
Total stockholders' equity 731,566     672,590  
Total liabilities and stockholders' equity $ 1,785,923     $ 1,581,248  


Boise Cascade Company
Consolidated Statements of Cash Flows
(in thousands)

  Nine Months Ended September 30
  2019   2018
Cash provided by (used for) operations      
Net income $ 66,278     $ 92,723  
Items in net income not using (providing) cash      
Depreciation and amortization, including deferred financing costs and other 61,340     71,832  
Stock-based compensation 6,016     6,893  
Pension expense 2,687     25,000  
Deferred income taxes 10,008     883  
Change in fair value of interest rate swaps 3,103     (2,419 )
Other (235 )   8,695  
Decrease (increase) in working capital, net of acquisitions      
Receivables (77,811 )   (64,261 )
Inventories 45,184     (88,073 )
Prepaid expenses and other (3,516 )   (2,736 )
Accounts payable and accrued liabilities 66,130     83,204  
Pension contributions (1,324 )   (21,566 )
Income taxes payable 19,109     6,991  
Other (2,219 )   2,655  
Net cash provided by operations 194,750     119,821  
       
Cash provided by (used for) investment      
Expenditures for property and equipment (53,249 )   (47,705 )
Acquisitions of businesses and facilities (15,676 )   (17,532 )
Proceeds from sales of facilities 2,493      
Proceeds from sales of assets and other 1,644     835  
Net cash used for investment (64,788 )   (64,402 )
       
Cash provided by (used for) financing      
Borrowings of long-term debt, including revolving credit facility 5,500     7,500  
Payments of long-term debt, including revolving credit facility (5,500 )   (7,500 )
Dividends paid on common stock (11,070 )   (47,113 )
Tax withholding payments on stock-based awards (3,575 )   (5,135 )
Other (545 )   1,031  
Net cash used for financing (15,190 )   (51,217 )
       
Net increase in cash and cash equivalents 114,772     4,202  
       
Balance at beginning of the period 191,671     177,140  
       
Balance at end of the period $ 306,443     $ 181,342  


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 2018 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.
      a.     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 change in fair value of interest rate swaps. The following table reconciles net income to EBITDA and Adjusted EBITDA for the three months ended September 30, 2019 and 2018, and June 30, 2019, and the nine months ended September 30, 2019 and 2018:

  Three Months Ended   Nine Months Ended
  September 30   June 30,
 2019
  September 30
  2019   2018     2019   2018
  (in thousands)
Net income $ 27,171     $ 13,848     $ 27,718     $ 66,278     $ 92,723  
Interest expense 6,532     6,585     6,486     19,455     19,527  
Interest income (837 )   (500 )   (416 )   (1,745 )   (1,001 )
Income tax provision (benefit) 9,650     (814 )   9,751     22,601     22,811  
Depreciation and amortization 20,969     23,881     19,454     59,640     70,288  
EBITDA 63,485     43,000     62,993     166,229     204,348  
Change in fair value of interest rate swaps 569     (279 )   1,551     3,103     (2,419 )
Adjusted EBITDA $ 64,054     $ 42,721     $ 64,544     $ 169,332     $ 201,929  

The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the three months ended September 30, 2019 and 2018, and June 30, 2019, and the nine months ended September 30, 2019 and 2018:

  Three Months Ended   Nine Months Ended
  September 30   June 30,
 2019
  September 30
  2019   2018     2019   2018
  (in thousands)
Wood Products                  
Segment income $ 15,597     $ 13,929     $ 18,908     $ 46,135     $ 76,532  
Depreciation and amortization 15,252     18,727     14,092     43,082     55,724  
EBITDA $ 30,849     $ 32,656     $ 33,000     $ 89,217     $ 132,256  
                   
Building Materials Distribution                  
Segment income $ 38,665     $ 23,504     $ 33,800     $ 89,982     $ 103,605  
Depreciation and amortization 5,278     4,755     5,028     15,438     13,374  
EBITDA $ 43,943     $ 28,259     $ 38,828     $ 105,420     $ 116,979  
                   
Corporate                  
Unallocated corporate expenses $ (9,364 )   $ (6,978 )   $ (7,576 )   $ (24,433 )   $ (23,822 )
Foreign currency exchange gain (loss) (200 )   163     248     210     (272 )
Pension expense (excluding service costs) (1,613 )   (11,778 )   (290 )   (2,202 )   (24,402 )
Change in fair value of interest rate swaps (569 )   279     (1,551 )   (3,103 )   2,419  
Depreciation and amortization 439     399     334     1,120     1,190  
EBITDA (11,307 )   (17,915 )   (8,835 )   (28,408 )   (44,887 )
Change in fair value of interest rate swaps 569     (279 )   1,551     3,103     (2,419 )
Corporate adjusted EBITDA $ (10,738 )   $ (18,194 )   $ (7,284 )   $ (25,305 )   $ (47,306 )
                   
Total company adjusted EBITDA $ 64,054     $ 42,721     $ 64,544     $ 169,332     $ 201,929  

Investor Contact:  Wayne Rancourt, 208-384-6073
Media Contact:  Lisa Chapman, 208-384-6552

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