Boise Cascade saw its net income rise significantly and net sales dip slightly year over year (YOY) in the third quarter of 2019. Boise Cascade generated net sales of $1.27 billion, down slightly from $1.34 billion from the third quarter of 2018.
The building products distributor posted a net income of $27.1 million, a 96% increase from the net income posted in the same period in 2018, according to Boise Cascade’s third quarter earnings report. The third quarter of 2019 included $1.0 million of after-tax losses, compared to $16.7 million of after-tax losses in the third quarter of 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,” CEO Tom Corrick said in a news release. “BMD [Building Materials Distribution] delivered outstanding financial results during the third quarter, with solid growth in general line product sales and gross margins.”
Wood product sales decreased 19% YOY to $325.1 million in the third quarter of 2019. Boise Cascade attributed the decline in sales primarily to lower sales prices and sales volume for plywood as a result of weaker market conditions and downtime for facility capital improvements. The distributor’s closing of three lumber mills and its particleboard plant in 2018 contributed to lower sales volume of lumber and particleboard in the quarter, according to Boise Cascade. Decreases attributed to the facility closures were partially offset by increases in sales volume and net sale prices for laminated veneer lumber (LVL).
Building materials distribution sales decreased marginally from $1.16 billion to $1.15 billion in the third quarter. The overall decrease in sales was driven primarily by a sales price decrease of 11% YOY, partially offset by a sales volume increase of 10%. Excluding the positive effects of acquisitions, building materials distribution sales would have decreased 4% YOY.
“Our operating results have positioned us to comfortably fund our bolt-on acquisitions and internal growth initiatives while strengthening our balance sheet,” Corrick said. “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.”
