With its latest acquisitions, Boise Cascade Company (NASDAQ:BCC), has positioned itself as one of the biggest producers of plywood and products made from engineered wood in North America. It has also become the principal wholesale distributor of building products in the nation which is making its current share price look potentially very attractive.
Expected Q1 Results
The company will host a conference call and a webcast to discuss its earnings for the first quarter of 2016 on May 3rd, starting at 11 a.m. EST. Some analysts are already predicting $0.06 earnings per share on $831.99 million revenue, although the consensus range is still quite wide at $-0.1 to $0.38 EPS on revenue ranging from $804.60 million to $849.70 million.
For the previous quarter, Boise Cascade Company (NASDAQ:BCC) missed the consensus expectations of $0.28 as it reported earnings per share of $0.06 on revenue of $876.5 million while revenue, however, came in above the consensus of $856.99 million. Going back two previous quarters, the company showed an increase in revenue for Q3 of 2015 when it reported $991.6 million, up from $955.4 million for the second quarter. However, both quarters still significantly underperformed analyst’s estimates which were $969.56 million for Q2 and $1.01 billion for Q3.
The company’s share price has been in somewhat of an upheaval recently, as it has fallen to around $21.21, well below the average expected level which estimates the share value at $28.75. This also marks a drop of 46.71 percent from its all time high and a decline of 16.92 percent for this year so far. The company currently has market capitalization of $822.48 million, with nearly 0.3 million shares in circulation.
In March, the company finalized the acquisition of Georgia-Pacific LLC`s engineered facilities for lumber production for $215 million. The deal for facilities located in Roxboro, North Carolina and Thorsby, Alabama, also included closing date working capital estimated at $25 million. Boise Cascade Company (NASDAQ:BCC) paid for the acquisition with $90 million in cash and $130 million in new borrowing.
The deal will help Boise Cascade optimize its production and speed up deliveries to customers located in the southeastern United States. It will also give the company strategically placed engineered lumber facilities throughout the entire North American market, helping them take full advantage of the recovering housing market. The newly acquired facilities in Roxboro and Thorsby currently produce I-joists and laminated veneer lumber, respectively.
The company is planning to invest additional capital and to employ more workers to increase its production levels at these two factories during this year, and should be able to see substantial logistics benefits. This will help it meet demand from the consistent growth in the construction of residential houses. The addition of these two mills could increase its laminated veneer lumber capacity by 9 million cubic feet and its capacity for I-joist production by an impressive 80 million lineal feet positioning it for strong future growth.