EX-99.3 6 bccpfcfsex993.htm EXHIBIT 99.3 BCC PF CFS Ex 99.3


Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Boise Cascade Company (the "Company") derived the following unaudited pro forma financial data by applying pro forma adjustments to its unaudited balance sheet as of June 30, 2013 and the audited statement of operations for the year ended December 31, 2012 and its unaudited statement of operations for the six months ended June 30, 2013.
The unaudited pro forma condensed combined balance sheet at June 30, 2013, and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2012 and the six months ended June 30, 2013, give effect to the following transactions as if each had occurred on June 30, 2013 for balance sheet purposes and on January 1, 2012 for statements of operations purposes:
1.
Common Stock Repurchase
On July 30, 2013, the Company repurchased 3,864,062 shares of its common stock from Boise Cascade Holdings, L.L.C. (“BC Holdings”) for approximately $100.0 million.
2.
Senior Notes Issuance
On August 15, 2013, the Company completed the sale of $50.0 million aggregate principal amount of 6 3/8 % senior notes due 2020 at an issue price of 103.5% of the principal amount of the notes, plus accrued interest from May 1, 2013. The notes were sold to the initial purchasers thereof for resale to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S of the Securities Act of 1933, as amended.
3.
Acquisition of Wood Resources LLC Southeast Operations
On September 30, 2013, the Company completed the purchase of the Wood Resources LLC Southeast Operations for $102.0 million in cash (subject to working capital adjustment). These operations were acquired through the acquisition of 100% of the equity interests of Chester Wood Products LLC and Moncure Plywood LLC.
The unaudited pro forma adjustments are based on available information and certain assumptions that the Company believes are reasonable. The unaudited pro forma condensed combined financial information was prepared on a basis consistent with that used in preparing the Company's audited consolidated financial statements and includes all adjustments, consisting of normal and recurring items, that the Company considers necessary for a fair presentation of its financial position and results of operations for the unaudited periods.
The unaudited pro forma condensed combined financial information should be read in conjunction with the historical financial statements of Wood Resources LLC Southeast Operations, including the notes thereto, which are included as Exhibit 99.2 to this Current Report on Form 8-K, as well as in conjunction with the Company's historical consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 and the Company's Quarterly Report on Form 10-Q for the six months ended June 30, 2013.
The unaudited pro forma condensed combined financial information is for informational purposes only and is not intended to represent or be indicative of the consolidated results of operations or financial position that the Company would have reported had the transactions described above been completed on the dates indicated and should not be taken as representative of the Company's future consolidated results of operations or financial position. The unaudited pro forma condensed combined financial information does not give effect to any potential cost savings or other operational efficiencies that could result from the acquisition of Chester Wood Products LLC and Moncure Plywood LLC. In addition, the preliminary estimated allocation of the related purchase price to the assets and liabilities acquired was based on Wood Resources LLC Southeast Operations historical financial statements and Boise Cascade's estimates based on available information and certain assumptions that the Company

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believes are reasonable. Accordingly, the purchase price allocation pro forma adjustments are preliminary and have been presented solely for the purpose of providing unaudited pro forma condensed combined financial information in this Current Report on Form 8-K. Additionally, subsequent to the completion of the Acquisition, the Company will further review Wood Products LLC Southeast Operations accounting policies for conformity with accounting policies adopted by the Company. At this time, the Company is not aware of any differences that would have a material impact on the combined financial statements.

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Boise Cascade Company
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2013
 
 
 
Pro Forma Adjustments
 
 
 
 
 
Pro Forma Adjustments
 

 
June 30, 2013 (Historical)
 
Stock Repurchase and Notes Offering
 
Pro Forma for Stock Repurchase and Notes Offering
 
Wood Resources LLC SE Operations as of June 30, 2013 (Historical)
 
Wood Resources LLC SE Operations Acquisition
 
Pro Forma Combined
 
(thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
232,667

 
$
(100,000
)
(a)
$
183,392

 
$
—

 
$
25,000

(d)
$
106,392

 
 
 
51,750

(b)
 
 
 
 
(102,000
)
(e)
 
 
 
 
(1,025
)
(c)
 
 
 
 
 
 
 
Receivables
212,768

 
—

 
212,768

 
6,371

 
(120
)
(f)
219,019

Inventories
368,350

 
—

 
368,350

 
6,941

 
400

(g)
375,691

Deferred income taxes
19,749

 
—

 
19,749

 
—

 
—

 
19,749

Prepaid expenses and other
11,851

 
—

 
11,851

 
304

 
—

 
12,155

Total current assets
845,385

 
(49,275
)
 
796,110

 
13,616

 
(76,720
)
 
733,006

 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
261,309

 
—

 
261,309

 
10,461

 
74,500

(h)
346,270

Timber deposits
7,267

 
—

 
7,267

 
—

 
—

 
7,267

Deferred financing costs
7,279

 
1,025

(c)
8,304

 
—

 
—

 
8,304

Goodwill
12,170

 
—

 
12,170

 
—

 
8,222

(i)
20,392

Intangible assets, net
8,900

 
—

 
8,900

 
—

 
2,000

(i)
10,900

Deferred income taxes
44,819

 
—

 
44,819

 
—

 
—

 
44,819

Other assets
7,486

 
—

 
7,486

 
—

 
—

 
7,486

Total Assets
$
1,194,615

 
$
(48,250
)
 
$
1,146,365

 
$
24,077

 
$
8,002

 
$
1,178,444

 
 
 
 
 
 
 
 
 
 
 
 

See accompanying notes to unaudited pro forma condensed combined financial information.


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Boise Cascade Company
Unaudited Pro Forma Condensed Combined Balance Sheet (continued)
As of June 30, 2013
 
 
 
Pro Forma Adjustments
 
 
 
 
 
Pro Forma Adjustments
 
 
 
June 30, 2013 (Historical)
 
Stock Repurchase and Notes Offering
 
Pro Forma for Stock Repurchase and Notes Offering
 
Wood Resources LLC SE Operations as of June 30, 2013 (Historical)
 
Wood Resources LLC SE Operations Acquisition
 
Pro Forma Combined
 
(thousands)
LIABILITIES AND STOCKHOLERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
Current
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
 
 
 
 
 
 
 
 
 
 
Trade
$
195,206

 
$
—

 
$
195,206

 
$
4,693

 
$
(120
)
(f)
$
199,779

Related parties
1,957

 
—

 
1,957

 
—

 
—

 
1,957

Book overdraft
—

 
—

 
—

 
2,290

 
(2,290
)
(j)
—

Accrued liabilities
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
42,039

 
—

 
42,039

 
1,542

 
—

 
43,581

Interest payable
2,745

 
—

 
2,745

 
—

 
—

 
2,745

Other
30,875

 
—

 
30,875

 
955

 
—

 
31,830

 
272,822

 
—

 
272,822

 
9,480

 
(2,410
)
 
279,892

 
 
 
 
 
 
 
 
 
 
 
 
Debt
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
250,000

 
51,750

(b)
301,750

 
—

 
25,000

(d)
326,750

 
 
 
 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
 
 
 
 
 
Compensation and benefits
195,384

 
—

 
195,384

 
—

 
—

 
195,384

Other long-term liabilities
14,447

 
—

 
14,447

 
9

 
—

 
14,456

 
209,831

 
—

 
209,831

 
9

 
—

 
209,840

 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
—

 
—

 
—

 
—

 
—

 
—

Common stock
432

 
—

 
432

 
—

 
—

 
432

Additional paid-in capital
494,908

 
—

 
494,908

 
—

 
—

 
494,908

Treasury stock
—

 
(100,000
)
(a)
(100,000
)
 
—

 
—

 
(100,000
)
Accumulated other comprehensive loss
(118,395
)
 
—

 
(118,395
)
 
—

 
—

 
(118,395
)
Retained earnings
85,017

 
—

 
85,017

 
—

 
—

 
85,017

Parent equity
—

 
—

 
—

 
14,588

 
2,290

(j)
—

 
 
 
 
 
 
 
 
 
(16,878
)
(k)
 
Total stockholders' equity
461,962

 
(100,000
)
 
361,962

 
14,588

 
(14,588
)
 
361,962

Total liabilities and stockholders' equity
$
1,194,615

 
$
(48,250
)
 
$
1,146,365

 
$
24,077

 
$
8,002

 
$
1,178,444

 
 
 
 
 
 
 
 
 
 
 
 
See accompanying notes to unaudited pro forma condensed combined financial information.

4


Boise Cascade Company
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2012
 
 
 
Pro Forma Adjustments
 
 
 
 
 
Pro Forma Adjustments
 
 
 
Year Ended December 31, 2012 (Historical)
 
Stock Repurchase and Notes Offering
 
Pro Forma for Stock Repurchase and Notes Offering
 
Wood Resources LLC SE Operations for the Year Ended December 31, 2012 (Historical)
 
Wood Resources LLC SE Operations Acquisition
 
Pro Forma Combined
 
(thousands, except per share data)
Sales
$
2,779,062

 
$
—

 
$
2,779,062

 
$
131,090

 
$
(4,772
)
(q)
$
2,905,380

 
 
 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
2,403,445

 
—

 
2,403,445

 
105,477

 
(4,636
)
(q)
2,504,286

Depreciation and amortization
33,407

 
—

 
33,407

 
3,234

 
6,733

(r)
43,474

 
 
 
 
 
 
 
 
 
100

(s)
 
Selling, general, and administrative expenses
279,079

 
—

 
279,079

 
6,663

 
—

 
285,742

 
2,715,931

 
—

 
2,715,931

 
115,374

 
2,197

 
2,833,502

 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
63,131

 
—

 
63,131

 
15,716

 
(6,969
)
 
71,878

 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange gain
37

 
—

 
37

 
—

 
—

 
37

Interest expense
(21,757
)
 
(2,948
)
(m)
(24,845
)
 
—

 
(500
)
(t)
(25,345
)
 
 
 
(140
)
(n)
 
 
 
 
 
 
 
Interest income
392

 
—

 
392

 
—

 
—

 
392

 
(21,328
)
 
(3,088
)
 
(24,416
)
 
—

 
(500
)
 
(24,916
)
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
41,803

 
(3,088
)
 
38,715

 
15,716

 
(7,469
)
 
46,962

Income tax benefit (provision)
(307
)
 
1,189

(o)
882

 
—

 
2,875

(o)
(2,294
)
 
 
 
 
 
 
 
 
 
(6,051
)
(u)
 
Net income (loss)
$
41,496

 
$
(1,899
)
 
$
39,597

 
$
15,716

 
$
(10,645
)
 
$
44,668

 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
29,700

 
(3,864
)
(p)
25,836

 
—

 
—

 
25,836

 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
 
Basic and diluted
$
1.40

 
 
 
$
1.53

 
 
 
 
 
$
1.73


See accompanying notes to unaudited pro forma condensed combined financial information.


5


Boise Cascade Company
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Six Months Ended June 30, 2013
 
 
 
Pro Forma Adjustments
 
 
 
 
 
Pro Forma Adjustments
 
 
 
Six Months Ended June 30, 2013 (Historical)
 
Stock Repurchase and Notes Offering
 
Pro Forma for Stock Repurchase and Notes Offering
 
Wood Resources LLC SE Operations for the Six Months Ended June 30, 2013 (Historical)
 
Wood Resources LLC SE Operations Acquisition
 
Pro Forma Combined
 
(thousands, except per share data)
Sales
$
1,597,173

 
$
—

 
$
1,597,173

 
$
75,652

 
$
(2,458
)
(q)
$
1,670,367

 
 
 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
1,395,843

 
—

 
1,395,843

 
57,462

 
(2,369
)
(q)
1,450,936

Depreciation and amortization
17,243

 
—

 
17,243

 
1,666

 
3,366

(r)
22,325

 
 
 
 
 
 
 
 
 
50

(s)
 
Selling, general, and administrative expenses
137,230

 
—

 
137,230

 
3,770

 
—

 
141,000

 
1,550,316

 
—

 
1,550,316

 
62,898

 
1,047

 
1,614,261

 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
46,857

 
—

 
46,857

 
12,754

 
(3,505
)
 
56,106

 
 
 
 
 
 
 
 
 
 
 

Foreign exchange loss
(371
)
 
—

 
(371
)
 
—

 
—

 
(371
)
Interest expense
(9,672
)
 
(1,474
)
(m)
(11,216
)
 
—

 
(250
)
(t)
(11,466
)
 
 
 
(70
)
(n)
 
 
 
 
 
 
 
Interest income
124

 
—

 
124

 
47

 
—

 
171

 
(9,919
)
 
(1,544
)
 
(11,463
)
 
47

 
(250
)
 
(11,666
)
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
36,938

 
(1,544
)
 
35,394

 
12,801

 
(3,755
)
 
44,440

Income tax benefit (provision)
54,310

(l)
595

(o)
54,905

 
—

 
1,446

(o)
51,423

 
 
 
 
 
 
 
 
 
(4,928
)
(u)
 
Net income (loss)
$
91,248

 
$
(949
)
 
$
90,299

 
$
12,801

 
$
(7,237
)
 
$
95,863

 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic
40,415

 
(3,864
)
(p)
36,551

 
—

 
—

 
36,551

Diluted
40,417

 
(3,864
)
(p)
36,553

 
—

 
—

 
36,553

Net income per common share:
 
 
 
 
 
 
 
 
 
 
 
Basic
$
2.26

 
 
 
$
2.47

 
 
 
 
 
$
2.62

Diluted
$
2.26

 
 
 
$
2.47

 
 
 
 
 
$
2.62

See accompanying notes to unaudited pro forma condensed combined financial information.

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. Basis of Presentation
On July 19, 2013, the Company and the Company's wholly-owned subsidiary, Boise Cascade Wood Products, L.L.C. entered into a Limited Liability Company Interest Purchase Agreement (the "Purchase Agreement") to acquire all of the equity interests in the Wood Resources LLC Southeast Operations for an aggregate purchase price of $102.0 million, which is subject to adjustment based on Wood Resources LLC Southeast Operation's net working capital at the closing date of the Acquisition in accordance with terms of the Purchase Agreement. The Company financed the Acquisition with cash on hand and a $25.0 million draw under its revolving credit facility. Upon completion of the Acquisition, the Company accounted for the Acquisition as a purchase in accordance with accounting principles generally accepted in the United States of America. Under the purchase method the Company will record the assets and liabilities of the Southeast Operations at their respective fair values as of the Acquisition date.
2. Pro Forma Adjustments
The following notes relate to the unaudited pro forma condensed combined balance sheet:
(a)
To record the repurchase of 3,864,062 shares of common stock from BC Holdings on July 30, 2013.
(b)
To record the issuance of $50.0 million of senior notes on August 15, 2013, at an issue price of 103.5% of the principal amount. Excludes the receipt of $0.9 million of accrued interest on the notes.
(c)
To record capitalized fees and expenses associated with the senior notes offering.
(d)
To record a $25.0 million borrowing on the Company's revolving credit facility to finance a portion of the acquisition purchase price.
(e)
To record the $102.0 million acquisition consideration paid from cash on hand and with $25.0 million of borrowings under the Company's revolving credit facility.
(f)
To record the elimination of intercompany receivables and payables between Boise Cascade and Wood Resources LLC Southeast Operations.
(g)
To record the preliminary fair value adjustment for the Wood Resources LLC Southeast Operations inventory.
(h)
To record the preliminary fair value adjustment for the Wood Resources LLC Southeast Operations property and equipment.
(i)
To record preliminary estimated goodwill and intangibles related to the Wood Resources LLC Southeast Operations acquisition.
(j)
To record the elimination of the Wood Resources LLC Southeast Operations book overdraft. Wood Resources LLC Southeast Operations parent entity processed all cash receipts and disbursements for its Southeast Operations with offsetting entries to parent equity.
(k)
To record the elimination of parent equity in Wood Resources LLC Southeast Operations.
        
The following notes relate to the unaudited pro forma condensed combined statements of operations:
(l)
The six months ended June 30, 2013 includes a $68.7 million income tax benefit associated with the recording of net deferred tax assets upon the Company's conversion to a corporation in connection with its initial public offering.

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(m)
To record interest expense, net of debt issue premium amortization, on the $50.0 million of senior notes issued on August 15, 2013.
(n)
To record deferred financing cost amortization on the $50.0 million of senior notes.
(o)
To record the tax effect of the pro forma adjustments that are deductible based upon a combined statutory federal and state tax rate of 38.5%.
(p)
To record the repurchase of 3,864,062 shares of Boise Cascade common stock from BC Holdings for approximately $100.0 million on July 30, 2013.
(q)
To record the elimination of sales between Boise Cascade and Wood Resources LLC Southeast Operations.
(r)
To record additional depreciation resulting from the preliminary adjustment of Wood Resources LLC Southeast Operations property and equipment to estimated fair value based on a preliminary estimated average useful life of 11 years.
(s)
To record additional amortization expense resulting from the recording of intangible assets from the Acquisition based on a preliminary estimated average useful life of 20 years.
(t)
To record interest expense, at an assumed borrowing rate of 2.0%, on $25.0 million of borrowings under the Company's revolving credit facility used to finance a portion of the Acquisition purchase price.
(u)
To record tax provision on the historical financial results of Wood Resources LLC Southeast Operations based upon a combined statutory federal and state tax rate of 38.5%. Both Chester Wood Products LLC and Moncure Plywood LLC were organized as limited liability companies and were therefore not subject to entity-level federal or state income taxation historically.


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