UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10 - Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the Quarterly Period Ended March 31, 1997
( ) Transition Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the Transition Period From ___________ to _____________
Commission file number 1-5057
BOISE CASCADE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 82-0100960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1111 West Jefferson Street
P.O. Box 50
Boise, Idaho 83728-0001
(Address of principal executive offices) (Zip Code)
(208) 384-6161
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding
Class as of April 30, 1997
Common stock, $2.50 par value 48,534,360
PART I - FINANCIAL INFORMATION
STATEMENTS OF INCOME (LOSS)
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Item 1. Financial Statements
Three Months Ended March 31
1997 1996
(expressed in thousands,
except per share data)
Revenues
Sales $1,273,610 $1,227,600
Other income (expense), net (260) 6,260
__________ __________
1,273,350 1,233,860
__________ __________
Costs and expenses
Materials, labor, and other operating expenses 1,048,020 967,620
Depreciation and cost of company timber
harvested 56,470 55,340
Selling and administrative expenses 163,500 135,810
__________ __________
1,267,990 1,158,770
__________ __________
Equity in net income of affiliates 30 1,090
__________ __________
Income from operations 5,390 76,180
__________ __________
Interest expense (27,700) (30,560)
Interest income 2,090 340
Foreign exchange loss (10) (250)
Gain on subsidiary's issuance of stock - 430
__________ __________
(25,620) (30,040)
__________ __________
Income (loss) before income taxes and
minority interest (20,230) 46,140
Income tax provision (benefit) (7,890) 17,830
__________ __________
Income (loss) before minority interest (12,340) 28,310
Minority interest, net of income tax (2,870) (2,800)
__________ __________
Net income (loss) $ (15,210) $ 25,510
Net income (loss) per common share
Primary $ (.51) $ .32
Fully diluted $ (.51) $ .30
Dividends declared per common share $ .15 $ .15
The accompanying notes are an integral part of these Financial Statements.
SEGMENT INFORMATION
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Three Months Ended March 31
1997 1996
(expressed in thousands)
Segment sales
Paper and paper products $ 370,554 $ 495,925
Office products 597,871 461,423
Building products 377,382 347,957
Intersegment eliminations and other (72,197) (77,705)
__________ __________
$1,273,610 $1,227,600
Segment operating income (loss)
Paper and paper products $ (22,667) $ 53,427
Office products 28,515 27,615
Building products 10,392 888
Equity in net income of affiliates 30 1,090
Corporate and other (10,880) (6,840)
__________ __________
Income from operations $ 5,390 $ 76,180
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
ASSETS (unaudited)
March 31 December 31
1997 1996 1996
(expressed in thousands)
Current
Cash and cash items $ 70,913 $ 39,721 $ 40,066
Short-term investments at cost,
which approximates market 99,112 8,944 220,785
__________ __________ __________
170,025 48,665 260,851
Receivables, less allowances of
$5,105,000, $3,734,000, and
$4,911,000 505,515 484,017 476,339
Inventories 512,854 617,208 540,433
Deferred income tax benefits 57,402 78,858 53,728
Other 26,676 130,936 24,053
__________ __________ __________
1,272,472 1,359,684 1,355,404
__________ __________ __________
Property
Property and equipment
Land and land improvements 40,174 40,191 40,393
Buildings and improvements 470,570 464,661 452,578
Machinery and equipment 3,917,249 4,433,607 3,859,124
__________ __________ __________
4,427,993 4,938,459 4,352,095
Accumulated depreciation (1,849,420) (2,198,192) (1,798,349)
__________ __________ __________
2,578,573 2,740,267 2,553,746
Timber, timberlands, and timber
deposits 293,678 377,165 293,028
__________ __________ __________
2,872,251 3,117,432 2,846,774
__________ __________ __________
Investments in equity affiliates 35,479 31,706 19,430
Other assets 495,996 425,061 489,101
__________ __________ __________
Total assets $4,676,198 $4,933,883 $4,710,709
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(unaudited)
March 31 December 31
1997 1996 1996
(expressed in thousands)
Current
Notes payable $ 25,600 $ 93,000 $ 36,700
Current portion of long-term debt 156,886 18,653 157,304
Income taxes payable 5,261 707 3,307
Accounts payable 421,064 410,910 427,224
Accrued liabilities
Compensation and benefits 118,240 138,923 119,282
Interest payable 26,880 25,496 31,585
Other 157,345 153,316 157,156
__________ __________ __________
911,276 841,005 932,558
__________ __________ __________
Debt
Long-term debt, less current portion 1,359,753 1,552,726 1,330,011
Guarantee of ESOP debt 196,116 213,934 196,116
__________ __________ __________
1,555,869 1,766,660 1,526,127
__________ __________ __________
Other
Deferred income taxes 239,665 298,727 249,676
Other long-term liabilities 242,601 255,290 240,323
__________ __________ __________
482,266 554,017 489,999
__________ __________ __________
Minority interest 85,862 70,386 81,534
__________ __________ __________
Shareholders' equity
Preferred stock -- no par value;
10,000,000 shares authorized;
Series D ESOP: $.01 stated
value; 5,695,464; 6,062,101;
and 5,904,788 shares outstanding 256,296 272,795 265,715
Deferred ESOP benefit (196,116) (213,934) (196,116)
Series F: $.01 stated value;
115,000 shares outstanding 111,043 111,043 111,043
Series G: $.01 stated value;
862,500 shares outstanding 176,404 176,404 176,404
Common stock -- $2.50 par value;
200,000,000 shares authorized;
48,511,585; 48,400,340; and
48,276,861 shares outstanding 121,328 120,051 121,191
Additional paid-in capital 233,846 216,392 230,728
Retained earnings 938,124 1,019,064 971,526
__________ __________ __________
Total shareholders' equity 1,640,925 1,701,815 1,680,491
__________ __________ __________
Total liabilities and shareholders'
equity $4,676,198 $4,933,883 $4,710,709
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended March 31
1997 1996
(expressed in thousands)
Cash provided by (used for) operations
Net income (loss) $ (15,210) $ 25,510
Items in income (loss) not using (providing) cash
Equity in net income of affiliates (30) (1,090)
Depreciation and cost of company timber
harvested 56,470 55,340
Deferred income tax provision (benefit) (9,742) 9,059
Minority interest, net of income tax 2,870 2,800
Amortization and other 4,981 5,084
Gain on subsidiary's issuance of stock - (430)
Receivables (26,644) 13,533
Inventories 29,899 (24,923)
Accounts payable and accrued liabilities (15,002) (26,072)
Current and deferred income taxes 1,172 (28,865)
Other 487 3,551
__________ __________
Cash provided by operations 29,251 33,497
__________ __________
Cash provided by (used for) investment
Expenditures for property and equipment (80,294) (170,616)
Expenditures for timber and timberlands (1,797) (1,795)
Investments in equity affiliates, net (16,014) (4,659)
Purchases of facilities (7,748) (129,259)
Other (11,168) 18,394
__________ __________
Cash used for investment (117,021) (287,935)
__________ __________
Cash provided by (used for) financing
Cash dividends paid
Common stock (7,271) (7,164)
Preferred stock (6,161) (6,126)
__________ __________
(13,432) (13,290)
Notes payable (11,100) 76,000
Additions to long-term debt 30,000 338,893
Payments of long-term debt (676) (153,127)
Other (7,848) 3,158
__________ __________
Cash provided by (used for) financing (3,056) 251,634
__________ __________
Decrease in cash and short-term investments (90,826) (2,804)
Balance at beginning of the year 260,851 51,469
__________ __________
Balance at March 31 $ 170,025 $ 48,665
The accompanying notes are an integral part of these Financial Statements.
Notes to Quarterly Financial Statements
(1) BASIS OF PRESENTATION. The quarterly financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. These
statements should be read together with the statements and the accom-
panying notes included in the Company's 1996 Annual Report.
The quarterly financial statements have not been audited by independent
public accountants, but in the opinion of management, all adjustments
necessary to present fairly the results for the periods have been
included. The net income (loss) for the three months ended
March 31, 1997 and 1996, was subject to seasonal variations and
necessarily involved estimates and accruals. Except as may be disclosed
within these "Notes to Quarterly Financial Statements," the adjustments
made were of a normal, recurring nature. Quarterly results are not
necessarily indicative of results that may be expected for the year.
(2) NET INCOME (LOSS) PER COMMON SHARE. Net income (loss) per common share
was determined by dividing net income (loss), as adjusted, by applicable
shares outstanding. For the three months ended March 31, 1997, the
computation of fully diluted net loss per share was antidilutive;
therefore, amounts reported for primary and fully diluted loss were the
same.
Three Months Ended March 31
1997 1996
(expressed in thousands)
Net Income (loss) as reported $ (15,210) $ 25,510
Preferred dividends (9,713) (9,849)
___________ ___________
Primary income (loss) (24,923) 15,661
Assumed conversions:
Preferred dividends eliminated - 3,739
Supplemental ESOP contribution - (3,195)
___________ ___________
Fully diluted income (loss) $ (24,923) $ 16,205
Average number of common shares
Average shares outstanding 48,512 47,858
Dilutive effect of stock options - 542
Dilutive effect of convertible
preferred stock - Series G - -
___________ ___________
Primary 48,512 48,400
Additional dilutive effect of
stock options - 106
Dilutive effect of convertible
preferred stock - Series D - 4,897
___________ ___________
Fully diluted 48,512 53,403
Average number of common shares
if all convertible securities
were dilutive
Primary shares 55,771 55,309
Fully diluted shares 60,427 60,312
Primary income excludes, and primary loss includes, the aggregate amount
of dividends on the Company's preferred stock, if dilutive. The
dividend attributable to the Company's Series D convertible preferred
stock held by the Company's ESOP (employee stock ownership plan) is net
of a tax benefit. To determine the fully diluted income (loss),
dividends on convertible preferred stock and interest, net of any
applicable taxes, have been added back to primary income (loss) to
reflect assumed conversions, if dilutive. The fully diluted income was
reduced by, and the fully diluted loss was increased by, the dilutive
after-tax amount of additional contributions that the Company would be
required to make to its ESOP if the Series D ESOP preferred shares were
converted to common stock.
For the three months ended March 31, 1997 and 1996, primary average
shares included common shares outstanding and, if dilutive, common stock
equivalents attributable to stock options and Series G conversion
preferred stock. For the three months ended March 31, 1997 and
1996, common stock equivalents attributable to the effect of the
Series G conversion preferred stock were antidilutive. Additionally,
for the three months ended March 31, 1997, common stock equivalents
attributable to stock options were antidilutive. Accordingly,
7,259,000 common stock equivalent shares for the three months ended
March 31, 1997, and 6,909,000 common stock equivalent shares for the
three months ended March 31, 1996, were excluded from the average
number of primary common shares.
In addition to common and common equivalent shares, fully diluted
average shares include common shares that would be issuable upon
conversion of the Company's other convertible securities, if dilutive.
For the three months ended March 31, 1997, all adjustments to arrive at
the average number of fully diluted common shares were antidilutive.
Accordingly, 11,915,000 common equivalent and other convertible shares
were excluded from the average number of fully diluted common shares for
that period. For the three months ended March 31, 1996, 6,909,000
common equivalent shares were excluded from the average number of fully
diluted common shares.
In February 1997, the Financial Accounting Standards Board issued
Statement 128, Earnings Per Share, which will be implemented in the
fourth quarter of 1997. The statement will have no impact on previously
reported fully diluted earnings (loss) per share which will be renamed
diluted earnings (loss) per share. Primary earnings (loss) per share
will be replaced with basic earnings (loss) per share which will not be
significantly different than the previously reported primary earnings
(loss) per share.
(3) INVENTORIES. Inventories include the following:
March 31 December 31
1997 1996 1996
(expressed in thousands)
Finished goods and work in process $391,133 $456,299 $390,694
Logs 61,567 95,535 98,883
Other raw materials and supplies 141,229 176,927 131,631
LIFO reserve (81,075) (111,553) (80,775)
________ ________ ________
$512,854 $617,208 $540,443
(4) INCOME TAXES. The estimated tax benefit rate for the first three months
of 1997, was 39%. The estimated tax provision rate, excluding the effect
of not providing taxes related to "Gain on subsidiary's issuance of
stock," for the first three months of 1996 was 39%. The actual annual
1996 tax provision rate, excluding the effect of not providing taxes
related to "Gain on subsidiary's issuance of stock" was 46%. The change
in the rate was due primarily to the sensitivity of the rate to lower
income levels and the mix of income sources.
(5) DEBT. On March 11, 1997, the Company signed a new revolving credit
agreement with a group of banks. The new agreement allows the Company
to borrow as much as $600 million at variable interest rates based on
customary indices, and expires in June 2002. The revolving credit
agreement contains financial covenants relating to minimum net worth,
minimum interest coverage ratios, and ceiling ratios of debt to
capitalization. The new agreement replaces the Company's previous $600
million revolving credit agreement that would have expired in June 2000.
At March 31, 1997, there were no borrowings under this agreement. The
Company's majority-owned subsidiary, Boise Cascade Office Products
Corporation ("BCOP"), has a $350 million revolving credit agreement with
a group of banks. Borrowing under this agreement was $170.0 million at
March 31, 1997. Also at March 31, 1997, BCOP had $25.6 million of
short-term borrowings outstanding.
(6) BOISE CASCADE OFFICE PRODUCTS CORPORATION. During the first three
months of 1997, BCOP made two acquisitions which were accounted for
under the purchase method of accounting. Accordingly, the purchase
prices were allocated to the assets acquired and liabilities assumed
based upon their estimated fair values. The initial purchase price
allocations may be adjusted within one year of the date of purchase for
changes in estimates of the fair values of assets and liabilities. Such
adjustments are not expected to be significant to results of operations
or the financial position of the Company. The excess of the purchase
price over the estimated fair value of the net assets acquired was
recorded as goodwill and is being amortized over 40 years. The results
of operations of the acquired businesses are included in BCOP's
operations subsequent to the dates of acquisition.
On January 31, 1997, BCOP acquired the stock of the contract stationer
business of The Office Stop, based in Butte, Montana. On February 28,
1997, BCOP acquired the assets of the contract stationer business of
Florida Ribbon and Carbon, based in Jacksonville, Florida. In January
1997, BCOP also completed a joint venture with Otto Versand to direct
market office products in Europe, initially in Germany. These
transactions, including the joint venture with Otto Versand, were
completed for cash of $14.9 million, $2.9 million of BCOP common stock
issued, and the recording of $1.0 million of acquisition liabilities.
On February 5, 1996, BCOP completed the acquisition of 100% of the
shares of Grand & Toy Limited (Grand & Toy) from Cara Operations Limited
(Toronto). On January 31, February 9, and March 29, 1996, BCOP acquired
businesses in New Mexico, Maine, Vermont, and Wisconsin. These
businesses were acquired for cash of $129.3 million and the recording of
$18.4 million of acquisition liabilities.
Unaudited pro forma results of operations reflecting the acquisitions
would have been as follows. If the 1997 acquisitions had occurred on
January 1, 1997, sales for the first three months of 1997 would have
increased by $3.6 million. There would have been no significant change
to net income and loss per common share. If the 1997 and 1996
acquisitions had occurred on January 1, 1996, sales for the first three
months of 1996 would have increased by $36.3 million. There would have
been no significant change to net income and earnings per common share.
This unaudited pro forma financial information does not necessarily
represent the actual consolidated results of operations that would have
resulted if the acquisitions had occurred on the dates assumed.
(7) SHAREHOLDER'S EQUITY. In October 1995, the Company announced that its
board of directors had authorized the Company to purchase up to
4,300,000 shares of its common stock or common stock equivalents. The
authorization superseded all previous stock buyback authorizations. In
1996, the Company announced that because of weakening operating condi-
tions in the Company's paper and wood products businesses, and the
decision to fund the Jackson pulp and paper mill expansion without a
joint venture partner, the Company has slowed the purchase of its
common stock or common stock equivalents. Since October 1995, the
Company purchased 624,011 shares of stock through March 31, 1997.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Three Months Ended March 31, 1997, Compared With Three Months Ended March 31,
1996
Boise Cascade Corporation's net loss for the first quarter of 1997 was
$15.2 million, compared with net income of $25.5 million for the first quarter
of 1996. Primary and fully diluted loss per common share for the first
quarter of 1997 were 51 cents. For the same quarter in 1996, primary earnings
per common share were 32 cents, while fully diluted earnings per common share
were 30 cents.
Sales for the first quarter of 1997 were $1.3 billion compared with
$1.2 billion for the first quarter of 1996.
The Company's paper segment reported an operating loss of $22.7 million in the
first quarter of 1997, compared with operating income of $53.4 million in the
first quarter of 1996. Sales fell 25% to $370.6 million in the first quarter
of 1997 from $495.9 million in the first quarter of 1996. The decline in
results was due primarily to lower paper prices. Average prices for all of
the Company's paper grades declined from first-quarter 1996 levels by $175 a
ton, or 26%. Sales volumes for the first quarter of 1997 were 634,000 tons,
compared with 602,000 tons in the first quarter of 1996 and 511,000 tons
excluding the Company's coated paper publication business, which was sold
November 1, 1996. The sold business contributed $90.1 million of sales and
$18.8 million of operating income in the first quarter of 1996.
Paper segment manufacturing costs in the first quarter of 1997 were $509 per
ton compared with $593 per ton in the comparison quarter. Excluding
manufacturing costs associated with the sold coated paper publication
business, first quarter 1996 costs were $560 per ton. The decrease from
quarter to quarter was due primarily to lower fiber costs and fixed costs
being spread over a larger number of tons of paper produced.
Operating income in the office products segment improved in the first quarter
of 1997 to $28.5 million, compared with $27.6 million in the prior-year
quarter. Net sales in the first quarter of 1997 increased 30% to $597.9
million, compared with $461.4 million in the first quarter of 1996. The
growth in sales resulted primarily from acquisitions and product line
extensions. Same location sales increased 12% in the first quarter of 1997,
compared with sales in the first quarter of 1996. Significant paper price
declines from the same quarter a year ago constrained revenue growth in the
current quarter. Gross margins were 25.2% in the first quarter of 1997
relative to 26.6% in the year-ago first quarter. The decrease in gross margins
was due, in part, to the fact that in the first quarter of 1996, paper costs
to BCOP were declining rapidly from the peak reached late in 1995, which
raised their gross margin in the first half of 1996. Also, the decrease in
gross margins was partly due to sales growth in technology-related products,
which have lower gross margins than BCOP's more traditional office products
line.
Building products operating income increased from $.9 million for the year-ago
first quarter to $10.4 million in the first quarter of 1997. Results for the
quarter just ended were stronger than those of a year ago, largely because of
improved prices for lumber and plywood. Relative to the year-ago quarter,
average prices for lumber increased 24% and plywood prices increased 4%. Unit
sales volumes for lumber and plywood decreased 5% and 4% respectively,
compared with the year-ago volumes. In the engineered wood products business,
total net sales dollars increased 25% compared with last year. Sales for the
building products segment were $377.4 million in the first quarter of 1997, up
8% compared with the $348.0 million reported in the first quarter of 1996.
For the first quarter of 1997, building materials distribution sales were up
18% from the comparison quarter. The improvement in sales resulted primarily
from the addition of three new distribution centers purchased in 1996.
Interest expense was $27.7 million in the first quarter of 1997, compared with
$30.6 million in the same period last year. However, capitalized interest in
the first quarter of 1997 totaled $6.4 million compared with $2.9 million in
the first quarter of 1996. The increase was due primarily to the expansion of
the Jackson pulp and paper mill. With the start-up of the expansion in April
1997, the amount of interest capitalized will decrease significantly. The
Company's debt is predominately fixed rate. Consequently, the Company
experiences only modest changes in interest expense when market interest
rates change.
Financial Condition
At March 31, 1997, the Company had working capital of $361.2 million. Working
capital was $518.7 million at March 31, 1996, and $422.8 million at
December 31, 1996. Cash provided by operations was $29.3 million for the
first three months of 1997, compared with $33.5 million for the same period in
1996.
On March 11, 1997, the Company signed a new revolving credit agreement with a
group of banks. The new agreement allows the Company to borrow as much as
$600 million at variable interest rates based on customary indices, and
expires in June 2002. The revolving credit agreement contains financial
covenants relating to minimum net worth, minimum interest coverage ratios, and
ceiling ratios of debt to capitalization. The payment of dividends by the
Company is dependent upon the existence of and the amount of net worth in
excess of the defined minimum under this agreement. The new agreement
replaces the Company's previous $600 million revolving credit agreement that
would have expired in June 2000. At March 31, 1997, there were no borrowings
under the new agreement.
At March 31, 1997, BCOP had a $350.0 million revolving credit agreement with a
group of banks that expires in 2001 and provides for variable rates of
interest based upon customary indices. As of March 31, 1997, borrowings under
the agreement totaled $170.0 million. The BCOP revolving credit facility
contains customary terms, including covenants specifying a minimum net worth,
a minimum fixed charge coverage ratio, and a maximum leverage ratio. Also at
March 31, 1997, BCOP had $25.6 million of short-term borrowings outstanding.
At March 31, 1997, the Company and BCOP met all of the financial covenants
related to their debt.
Capital expenditures for the first three months of 1997 and 1996 were
$109.7 million and $320.0 million. Capital expenditures for the year ended
December 31, 1996, were $832.2 million. The decrease in capital expenditures
is primarily due to nearing completion of the Jackson pulp and paper mill
expansion and lower acquisition spending by BCOP.
An expanded discussion and analysis of financial condition is presented on
pages 18 and 19 of the Company's 1996 Annual Report under the captions
"Financial Condition" and "Capital Investment."
Market Conditions
The Company's office products business is expected to continue to perform
well, as it executes its growth strategy. Barring a downturn in the economy,
the building products business should report seasonally improved results, with
favorable wood products volumes and prices, while the paper business should
strengthen over the course of the year, as order files firm, order backlogs
lengthen, and paper prices improve. Boise Cascade's paper business is also
expected to be aided later in the year by the addition of the new 330,000 tons-
per-year uncoated free sheet paper machine at the Company's mill in Jackson,
Alabama. The machine started up in April 1997.
New Accounting Standard
In February 1997, the Financial Accounting Standards Board issued Statement
128, Earnings Per Share, which will be implemented in the fourth quarter of
1997. The statement will have no impact on previously reported fully diluted
earnings (loss) per share which will be renamed diluted earnings (loss) per
share. Primary earnings (loss) per share will be replaced with basic earnings
(loss) per share which will not be significantly different than the previously
reported primary earnings (loss) per share.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the Company's annual report on Form 10-K for the year
ended December 31, 1996, for information concerning legal proceedings.
As reported in the Company's 1996 Form 10-K, on March 12, 1996, a lawsuit
purporting to be a nationwide class action was filed against the Company in
the Fourth Judicial District Court, Ada County, Idaho. This lawsuit alleges,
among other allegations, that hardboard siding manufactured by the Company,
which was used as exterior cladding for buildings, was inherently defective.
The purported class, which has not been certified, is alleged to consist of
all owners of buildings or structures in the United States on which hardboard
siding manufactured by the Company is installed. The District Court is
expected to decide the issue of class certification sometime between July and
December 1997. The Complaint seeks, among other items, to declare the Company
financially responsible for the repair and replacement of all such siding, to
make restitution to the class members, and to award each class member
compensatory and punitive damages. The Company discontinued manufacturing the
hardboard siding product which is the subject of this litigation in 1984. The
Company believes that there are valid factual and legal defenses to this case
and will vigorously defend all claims asserted by the Plaintiffs.
The Company is involved in other litigation and administrative proceedings
arising in the normal course of its business. In the opinion of management,
the Company's recovery, if any, or the Company's liability, if any, under any
pending litigation or administrative proceeding, including that described in
the preceding paragraph, would not materially affect its financial condition
or operations.
Item 2. Changes in Securities
The payment of dividends by the Company is dependent upon the existence of and
the amount of net worth in excess of a defined minimum under the Company's
revolving credit agreement. At March 31, 1997, there were no borrowings under
the agreement.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual shareholders meeting on April 18, 1997. A total
of 55,112,379 shares of common and preferred stock were outstanding and
entitled to vote at the meeting. Of the total outstanding, 49,136,831 shares
were represented at the meeting.
Shareholders cast votes for election of the following directors whose terms
expire in 1998:
In Favor Withheld Not Voted
Philip J. Carroll 47,804,399 1,314,909 17,523
Gary G. Michael 47,981,863 1,137,445 17,523
Shareholders cast votes for election of the following directors whose terms
expire in 2000:
In Favor Withheld Not Voted
George J. Harad 48,001,175 1,118,133 17,523
Donald S. Macdonald 47,766,774 1,352,534 17,523
Jane E. Shaw 48,027,919 1,091,389 17,523
Edson W. Spencer 47,692,972 1,426,336 17,523
Continuing in office are Anne L. Armstrong and A. William Reynolds, whose
terms expire in 1998, and Robert K. Jaedicke, Paul J. Phoenix, Frank A.
Shrontz, and Ward W. Woods, Jr., whose terms expire in 1999.
The shareholders also ratified the appointment of Arthur Andersen LLP, as the
Company's independent auditors for the year 1997 with votes cast 48,237,284
for, 625,894 against, 256,346 abstained, and 17,307 not voted.
Two shareholder advisory proposals presented for vote at the annual
shareholders meeting were defeated. The proposal recommending that Boise
Cascade's directors take action to reincorporate the Company in Idaho was
defeated with votes cast 2,335,358 for, 41,013,201 against, 616,953 abstained,
and 5,171,319 not voted. The other, recommending that the board take steps to
declassify its structure so that all directors would stand for election
annually, was defeated with votes cast 18,459,921 for, 25,247,670 against,
259,720 abstained, and 5,169,520 not voted.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
A list of the exhibits required to be filed as part of this report
is set forth in the Index to Exhibits, which immediately precedes
such exhibits and is incorporated herein by this reference.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
March 31, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BOISE CASCADE CORPORATION
As Duly Authorized Officer and
Chief Accounting Officer: /s/Tom E. Carlile
Tom E. Carlile
Vice President and Controller
Date: May 12, 1997
BOISE CASCADE CORPORATION
INDEX TO EXHIBITS
Filed With the Quarterly Report on Form 10-Q
for the Quarter Ended March 31, 1997
Number Description Page Number
11 Computation of Per Share Earnings
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule