Boise Cascade rides the housing recovery wave

Boise Cascade Company reported steady top-line growth for the fourth quarter and fiscal 2015 period that rode largely on the continued momentum in housing construction.

"We expect the housing recovery to continue in 2016, with U.S. starts for the year projected to be between 1.20 and 1.25 million," said CEO Tom Corrick. "Increased housing construction should provide a favorable backdrop for engineered wood products in our manufacturing business, as well as revenue and earnings growth in our distribution business."

Net sales for the fourth quarter came in at $876.5 million, up 2% from the previous year's $862.0 million.

However, net income took a large hit, dropping from Q4 2014's $15.7 million to the current bottom-line figure of $2.3 million.

For the full fiscal year, net sales were $3.63 billion, also up 2% from the previous year's $3.57 billion. Again, income took a hit, coming in at $52.2 million from the previous year's $80.0 million.

The company also noted the steps it took in 2015 to increase its mid-cycle earnings capacity: commencing an upgrade of its Florien, Louisiana, plywood facility, as well installing new dryers at two locations.

However, the Wood Products sales didn't fare too well, with sales decreasing 8% to $292.3 million.

"Our Wood Products' operating results were negatively impacted by the continued erosion in plywood and pine lumber pricing during 2015," said Corrick. "Plywood markets were very challenging in the fourth quarter of 2015 and, disappointingly, pricing has eroded further as we begin 2016. With the strength of the U.S. dollar attracting imports and the planned ramp up of a new plywood mill this spring in Mississippi by a private equity firm, the oversupply situation is likely to continue until demand improves seasonally or domestic production declines."

However, the Building Materials Distribution segment got a sales boost of 6% to $707.3 million for the quarter.