Boise Cascade provides plywood and EWP production details
The company says it has sufficient materials on hand but will reduce its output in the second quarter.
Boise Cascade reported that it has implemented reductions to the volume of plywood and engineered wood products (EWP) the company will produce in the coming weeks.
The company said that it will reduce plywood production levels by 25% to 35% and EWP volumes by 20% to 40%, compared to first quarter levels. The Boise, Idaho-based building products supplier and distributor says it has sufficient inventory on hand.
Reductions in production will be implemented through a combination of curtailments and lowering operating schedules at some facilities.
Additionally, the company said that its Building Materials Distribution division will likely see reduced sales and earnings as a result of COVID-19.
“We are operating from a strong financial position, but we are taking necessary actions to reduce our production levels and costs in other parts of the Company in response to what we expect to be a significant decline in market demand over the next several months,” said Nate Jorgensen, CEO of Boise Cascade. “We are firmly committed to serving our customers, while taking steps to protect the well-being of our associates. We believe this will help ensure our business continues to generate value for our stakeholders well beyond this crisis.”
Boise Cascade reduced its planned capital spending for 2020 from its previously expected range of $85-to-$95 million to $50-to-$70 million. The Company is also closely scrutinizing all discretionary spending in response to the COVID-19 impact.
The company reported cash of $285 million at Dec. 31, 2019, which is expected to be used working capital increases in the first quarter, including accounts receivable, inventories, payment of accrued employee incentive compensation, customer sales incentives and similar items. Boise said it expects to report cash in excess of $200 million as of March 31.
On March 13, Boise negotiated an extension of its $350 million revolving credit agreement and the related $50 million term loan. As of March 31, 2020, Boise had availability under the revolving credit agreement in excess of $340 million and has no debt maturities prior to 2024.
“With the commitment and resilience of our 6,000+ associates, I remain confident that we are well positioned to weather the impacts of the pandemic and we will come through this as an even stronger organization,” said Jorgensen.
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The company said that it will reduce plywood production levels by 25% to 35% and EWP volumes by 20% to 40%, compared to first quarter levels. The Boise, Idaho-based building products supplier and distributor says it has sufficient inventory on hand.
Reductions in production will be implemented through a combination of curtailments and lowering operating schedules at some facilities.
Additionally, the company said that its Building Materials Distribution division will likely see reduced sales and earnings as a result of COVID-19.
“We are operating from a strong financial position, but we are taking necessary actions to reduce our production levels and costs in other parts of the Company in response to what we expect to be a significant decline in market demand over the next several months,” said Nate Jorgensen, CEO of Boise Cascade. “We are firmly committed to serving our customers, while taking steps to protect the well-being of our associates. We believe this will help ensure our business continues to generate value for our stakeholders well beyond this crisis.”Boise Cascade reduced its planned capital spending for 2020 from its previously expected range of $85-to-$95 million to $50-to-$70 million. The Company is also closely scrutinizing all discretionary spending in response to the COVID-19 impact.
The company reported cash of $285 million at Dec. 31, 2019, which is expected to be used working capital increases in the first quarter, including accounts receivable, inventories, payment of accrued employee incentive compensation, customer sales incentives and similar items. Boise said it expects to report cash in excess of $200 million as of March 31.
On March 13, Boise negotiated an extension of its $350 million revolving credit agreement and the related $50 million term loan. As of March 31, 2020, Boise had availability under the revolving credit agreement in excess of $340 million and has no debt maturities prior to 2024.
“With the commitment and resilience of our 6,000+ associates, I remain confident that we are well positioned to weather the impacts of the pandemic and we will come through this as an even stronger organization,” said Jorgensen.
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