Boise Cascade, L.l.c. · NYSE:BCC
Boise Cascade, L.l.c — D.A. Davidson & Co. Investor Presentation (June 2013)
38 slides from Boise Cascade, L.l.c's conference presentation, Jun 27, 2013
Slide 1: D.A. Davidson & Co. Investor Presentation
0 D.A. Davidson & Co. Investor Presentation June 28, 2013
Slide 2: Forward-Looking Statements / Non-GAAP Financial Measures
1 Forward-Looking Statements / Non-GAAP Financial Measures Forward-Looking Statements During the course of this presentation, we may make forward-looking statements or provide forward- looking information. All statements that address expectations or projections about the future are forward-looking s
Slide 3: Presenters
2 Presenters Tom Carlile Chief Executive Officer and Director • Started with Boise in 1973 • Chief Executive Officer and Director since August 2009 Wayne Rancourt Senior Vice President, Chief Financial Officer and Treasurer • Started with Boise in 1983 • Senior Vice President, Chief Financial Office
Slide 4: Quarterly BCC WP Realization vs. RL Composite Indexes
3 Quarterly BCC WP Realization vs. RL Composite Indexes
Slide 5: Composite Panel Prices
4 Composite Panel Prices Source: Random Lengths
Slide 6: Composite Lumber Prices
5 Composite Lumber Prices Source: Random Lengths
Slide 7: Second Quarter Pre-Announcement
6 Second Quarter Pre-Announcement 2013 2012 Preliminary Estimate As Reported As Reported Low-High Wood Products Segment income(1) $ 17.5 - 21.5 15.5$ 20.8$ Depreciation and amortization 6.5 - 6.5 6.1 6.3 EBITDA(1) 24.0 - 28.0 21.7 27.1 Building Materials Distribution Segment income (loss)(1) (1.2) -
Slide 8: The New Boise Cascade
7 The New Boise Cascade • Sold Timberlands for $1.6 bn • Sold $83 mm BZ stock • Acquired Pilot Rock, OR sawmill • Refinancing with $250 mm of senior notes • Acquired Arden, WA sawmill Returning to the public equity markets as a more focused company • Sold Paper & Packaging to Boise Inc. (BZ) • $1.4
Slide 9: Company at a Glance
8 Company at a Glance 2012 Sales (1) : $2,779 million 2012 EBITDA (2) : $96.6 million (1) Segment percentages are calculated before intersegment eliminations. (2) Segment percentages exclude Corporate and Other segment expenses. 29% • Large, vertically-integrated building products company operating
Slide 10: Investment Highlights
9 Investment Highlights Leadership Positions in Wood Products Manufacturing and Building Materials Distribution on a National Scale Distinctive Competence in Managing Vertical Integration to Create Value Low-Cost Manufacturing and Distribution Footprint Driven by Significant Capital Investment and R
Slide 11: Leadership Positions in Building Products
10 Leadership Positions in Building Products ID FL NM DE MD TX OK KS NE SD ND MT WY CO UT AZ NV WA CA OR KY ME NY VT NH MA RI CT WV IN IL NC TN SC AL MS AR LA MO IA MN WI NJ GA DC VA MI OH PA Headquarters EWP Manufacturing Facilities (9) Other Wood Products Manufacturing Facilities (8) Building Mate
Slide 12: Vertical Integration Drives Value Proposition
11 Vertical Integration Drives Value Proposition • Manufacturing has superior access to the market through committed distributor • BMD benefits from committed manufacturing partnership • Joint service offerings provide unique and significant value to customers • On Manufacturing sales through BMD, w
Slide 13: Low Cost Manufacturing Footprint
12 Low Cost Manufacturing Footprint (1) Reopened LaGrande, OR sawmill on a limited basis in 2011. Results of Initiatives Key Cost Improvement Initiatives Closures Sold Curtailments Acquisitions Investments Process Improvements 6 high-cost facilities Cut production at a high-cost facility 2 sawmills,
Slide 14: Significant Investments Throughout Downturn
13 Significant Investments Throughout Downturn Capital Expenditures(1) Key Investments Since 2006 Wood Products • Internal veneer production to grow EWP – four dryer projects • Improved cost position within key wood basket – acquired two sawmills and a laminated beam plant Building Materials Distrib
Slide 15: Restructuring During Downturn Positioned Us For Earnings Growth
14 Restructuring During Downturn Positioned Us For Earnings Growth (1) Periods prior to 2009 adjusted to exclude paper and packaging assets sold in February 2008. Adjusted EBITDA and Housing Starts(1) ($ in millions) Despite 42% lower housing start levels, 2012 EBITDA was above 2007
Slide 16: Wood Products Overview
€3) Boise Cascade Wood Products Overview
Slide 17: Wood Products Overview
16 • Market leading positions across portfolio • #2 EWP producer in North America • #2 plywood producer in North America • Leading producer of Ponderosa Pine lumber • Products used primarily in new residential construction, repair and remodel, and light commercial construction • Vertically-integrate
Slide 18: Building Method Trends Favor EWP
17 Building Method Trends Favor EWP EWP primarily used in new residential construction • Increased use in residential construction • Stronger and longer than lumber • Fewer pieces used • Open rooms and taller walls • Lower installed cost • Reduced need for skilled labor • Simplified mechanical runs
Slide 19: Veneer Focused Converter with Superior Market Access
18 Veneer Focused Converter with Superior Market Access EWP Veneer Plywood Lumber Pulp Mills Particleboard Building Materials Distribution Independent Wholesalers Retail Lumberyards (Pro Dealers) Home Improvement Centers Industrial Converters Third-Party Building Products Wood Products
Slide 20: Vertical Integration Drives Market Share Gains
19 Vertical Integration Drives Market Share Gains Leveraging Unique Market Access . . . . . . To Grow EWP Sales Per Start (EWP Sales to Distribution) (MMft 3) (MMelf 2)
Slide 21: Clear Path to Growth in Wood Products
20 Housing Starts (mm): 1.801 1.355 0.906 0.554 0.587 0.609 0.780 0.963 Clear Path to Growth in Wood Products Boise LVL Press Utilization Boise LVL Sales Volume and Pricing Significant excess LVL capacity to meet growing demand
Slide 22: Favorable Plywood Industry Dynamics
21 Source: RISI. (Billion square ft. 3/8-inch basis) Favorable Plywood Industry Dynamics Industry Plywood Demand
Slide 23: Significant Progress During Downturn
22 Significant Progress During Downturn Wood Products Key Financials Composite Production Per Man Hour (Plywood & Veneer) (Indexed to 2007) ($ in millions) Cost reductions through downturn provide significant operating leverage as demand improves
Slide 24: Growth Strategies
23 Growth Strategies • Leverage Distribution relationship to drive returns • Continue to lower production costs • Optimize veneer utilization between EWP and plywood operations • Increase veneer production to support profitable growth • Reinvest to enhance competitive position • Pursue opportunistic
Slide 25: Building Materials Distribution Overview
Building Materials Distribution Overview
Slide 26: Building Materials Distribution Overview
25 Building Materials Distribution Overview 38% • One of largest U.S. wholesale building products distributors with 31 facilities • Broad product line • 3.8 million square feet of warehouse space • 1,000 – 3,000 SKUs per location • ~75% new residential / ~25% repair & remodel, and industrial and oth
Slide 27: Local Market Focus Supported by National Footprint
26 Local Market Focus Supported by National Footprint Local Branch Driven Market Response Sales/Marketing & Product Pricing Customer Relations Local Credit & Collections Logistics Management Product & Inventory Management Operations Oversight National Account Management National Vendor Relations Cen
Slide 28: National Distribution Platform
27 Independent Pro Dealers Pro Dealer Chains Industrial / Other Home Centers Key Suppliers National Distribution Platform 53% 21% 16% 10% Key Customers Customer Sales Breakdown National platform supports blue chip customer base and leading manufacturers
Slide 29: Growth Strategies: Well Positioned to Grow Distribution
28 Growth Strategies Well Positioned to Grow Distribution • Grow in existing geographic markets/branches • Leverage advantages of national scale • Opportunistically expand into adjacent markets Source: U.S. Census Bureau and Blue Chip Economic Indicators. (1) Represents approximate warehouse square
Slide 30: Financial Summary
Financial Summary
Slide 31: Focused on Creating Shareholder Value
30 Focused on Creating Shareholder Value • Compelling performance through cycle • Cost reduction • Improved quality of operations • Disciplined capital spending • Bolt-on acquisitions • Significant capacity available for growth • Focused on driving return on invested capital • Strong balance sheet,
Slide 32: Historical Financial Summary
31 Historical Financial Summary (1) Periods prior to 2009 adjusted to exclude paper and packaging assets sold in February 2008. Sales(1) Adjusted EBITDA(1) ($ in millions) ($ in millions) $3,795 $3,886 $3,667 $3,200 $2,637 $1,973 $2,241 $2,248 $2,779 2004 2005 2006 2007 2008 2009 2010 2011 2012 $301
Slide 33: Substantial Flexibility for Growth
32 Substantial Flexibility for Growth • Distributed $225 million to parent in late December 2012 • IPO proceeds restored cash balance and improved flexibility • Target total leverage of 2.5-3.0x • No near-term maturities • Upsized bank credit agreement to $300 million • Liquidity to fund strong orga
Slide 34: Investment Highlights
33 Investment Highlights Leadership Positions in Wood Products Manufacturing and Building Materials Distribution on a National Scale Distinctive Competence in Managing Vertical Integration to Create Value Low-Cost Manufacturing and Distribution Footprint Driven by Significant Capital Investment and
Slide 35: Appendix
© 5 © (5) oa 4 © (S) co) & i) fr) Appendix
Slide 36: Annual and Quarterly Financial Metrics
35 Annual Financial Metrics Historical Financial Performance Note: Dollars in millions. Quarterly Financial Metrics 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Building Materials Distribution $378 $471 $501 $429 $451 $581 $605 $553 $581 Wood Products 155 182 195 180 211 242 260 230 269 Eliminations &
Slide 37: Total Company EBITDA Reconciliation
36 Total Company EBITDA Reconciliation EBITDA represents income (loss) before interest (interest expense and interest income), income taxes, and depreciation and amortization. Adjusted EBITDA represents EBITDA as further adjusted to exclude certain special items. The following table reconciles net i
Slide 38: Segment EBITDA Reconciliations
37 Segment EBITDA Reconciliations Segment EBITDA represents segment income (loss) before depreciation and amortization. Adjusted segment EBITDA represents segment EBITDA as further adjusted to exclude certain special items. The following table reconciles segment income (loss) to segment EBITDA and a
BOISE CASCADE — D.A. Davidson & Co. Investor Presentation (June 2013) on 6ix