Boise Cascade Q1 2025 Earnings Report

Boise Cascade EPS Results

• Actual EPS: $1.06
• Consensus EPS: $1.36
• Beat/Miss: Missed by -$0.30
• One Year Ago EPS: $2.61

Boise Cascade Revenue Results

• Actual Revenue: $1.54 billion
• Expected Revenue: $1.53 billion
• Beat/Miss: Beat by +$9.84 million
• YoY Revenue Growth: -6.60%

Boise Cascade Announcement Details

• Quarter: Q1 2025
• Date: 5/5/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 9:30AM ET

Boise Cascade (NYSE:BCC) Company engages in manufacture of wood products and distribution of building materials in the United States and Canada. It operates through two segments, Wood Products and Building Materials Distribution. The Wood Products segment manufactures laminated veneer lumber and laminated beams used in headers and beams; I-joists for residential and commercial flooring and roofing systems, and other structural applications; structural, appearance, and industrial plywood panels; and ponderosa pine shop lumber and appearance grade boards. The Building Materials Distribution segment distributes a line of building materials, including oriented strand boards, plywood, and lumber; general line items, such as siding, composite decking, doors, metal products, insulation, and roofing; and engineered wood products. It markets and sells its products to dealers, home improvement centers, wholesalers, specialty distributors, and industrial converters for use in the construction of new residential housing, repair-and-remodeling of existing housing, construction of light industrial and commercial buildings, and other industrial applications. Boise Cascade Company was incorporated in 2004 and is headquartered in Boise, Idaho.

Boise Cascade Q1 2025 Earnings Call Transcript

Key Takeaways

• Boise Cascade reported Q1 sales of $1.5 billion, down 7% year-over-year, with net income of $40.3 million ($1.06 per share) versus $104.1 million ($2.61) amid constrained housing demand, affordability headwinds, trade uncertainty and adverse weather.
• The Wood Products segment saw sales fall 11% to $415.8 million and EBITDA shrink to $40.2 million, driven by lower engineered wood product and plywood prices/volumes and an $8 million hit from the planned Oakdale mill outage.
• Building Materials Distribution posted Q1 sales of $1.4 billion (down 7%) and EBITDA of $62.8 million, with a 40-basis-point margin decline to 14.7%, reflecting a 5% volume drop and 2% price decrease; however, March and April sales pace accelerated above $24 million per day.
• For Q2, the company expects EWP volumes to rise mid-to-high single digits sequentially with low-single-digit price declines, plywood volumes to increase mid single digits, and April BMD daily sales up ~13%; full-year capital expenditures remain guided at $220–$240 million, and YTD share repurchases total $71 million with $10 million in dividends paid.
• Boise Cascade emphasizes its strong balance sheet and long-term housing demand drivers—undersupply, aging U.S. housing stock and high homeowner equity—to support strategic investments, potential M&A and continued shareholder returns.

Presentation

[Operator]

Good morning. My name is Ryska, and I'll be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade's First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period.

[Operator]

It is now my pleasure to introduce you to Chris Forry, Vice President, Finance and Investor Relations, Boise Cascade. Mr. Forry, you may begin your conference.

[Chris Forrey, Vice President of Finance & Investor Relations at Boise Cascade Company]

Thank you, Rivka, and good morning, everyone. I'd like to welcome you to Boise Cascade's first quarter twenty twenty five earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO Jeff Strum, our COO Kelly Hibbs, our CFO Troy Little, head of our Wood Products Operations and Joe Barney, Head of our Building Materials Distribution Operations. Turning to slide two. This call will contain forward looking statements.

[Chris Forrey, Vice President of Finance & Investor Relations at Boise Cascade Company]

Please review the warning statements in our press release, on the presentation slides and in our filings with the SEC regarding the risks associated with these forward looking statements. Also, note that the appendix includes reconciliations from our GAAP net income to EBITDA and adjusted EBITDA and segment income to segment EBITDA. I will now turn the call over to Nate.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Thanks, Chris. Good morning, everyone. Thank you for joining us for our earnings call today. I'm on slide number three. Total U.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

S. Housing starts and single family housing starts decreased 26% respectively compared to the prior year quarter. Our consolidated first quarter sales of $1,500,000,000 were down 7% from first quarter twenty twenty four. Our net income was $40,300,000 or $1.06 per share compared to net income of 104,100,000.0 or $2.61 per share in the year ago quarter. Our team delivered solid results during the quarter when considering environment influenced by constrained demand, uncertain trade policies and difficult weather.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Homebuyer affordability challenges continue to affect demand and we were compounded by increasing economic uncertainty that has led us to lower consumer and builder confidence. Despite the backdrop, our associates across the company remain clearly focused on delivering value to our customer and better partners, which I'm incredibly grateful. In addition, the plant outage at our Oakdale, Louisiana plywood and veneer facility bill negatively impacted our first quarter results. The significant modernization products underway there are on schedule to be completed at the end of the second quarter and will contribute to the ongoing strength of our EWP franchise. Lastly, our clear focus on strategic investments and returns of capital to our shareholders is bolstered by the strength of our balance sheet and our constructive view on long term demand drivers for residential construction.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Kelly will now walk through our financial segment results and provide an update on our capital allocation priorities, after which I'll provide an outlook before we take your questions. Kelly?

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Thank you, Nate, and good morning everyone. Wood Products sales in the first quarter, including sales to our Distribution segment, were $415,800,000 down 11% compared to first quarter twenty twenty four. Wood Products segment EBITDA was $40,200,000 compared to EBITDA of $95,600,000 reported in the year ago quarter. The decrease in segment EBITDA was due primarily to lower EWP and plywood sales prices and lower EWP volumes. In addition, the scheduled Oakdale outage negatively impacted year over year and sequential EBITDA comparisons by approximately $8,000,000 and $7,000,000 respectively.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

In BMD, our sales in the quarter were $1,400,000,000 down 7% from first quarter twenty twenty four. BMD reported segment EBITDA of $62,800,000 in the first quarter compared to segment EBITDA of $83,600,000 in the prior year quarter. BMD's gross margin dollars decreased $20,400,000 from first quarter twenty twenty four, and our gross margin was 14.7%, a 40 basis point decline year over year. Turning to Slide five. On a year over year basis, first quarter volumes for both LVL and I joists were down 3%, better than the 6% year over year decline in single family housing starts.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

The pullback in starts stems from a consistent theme we hear from the builder community around moderating the pace of new starts as they continue to sell through higher than anticipated inventory levels. As it relates to pricing, sequential results for both LVL and I joists were down 3% due to continued pricing pressure created by the constrained demand environment and competition for share. Turning to Slide six. Our first quarter plywood sales volume was three sixty three million feet compared to three seventy two million feet in first quarter twenty twenty four, primarily driven by the planned outage at our Oakdale mill. The $341 per thousand average plywood net sales price in the first quarter was down 10% on a year over year basis and down 3% sequentially.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Moving to Slide seven and eight. BMD's year over year first quarter sales decline of 7% was driven by a 5% decrease in volume and a 2% decrease in price. By product line, commodity sales decreased 7%, general line product sales decreased 3%, and sales of EWP decreased 13%. Weather meaningfully influenced our sales activity in the first quarter, with our January and February daily pace below 21,500,000 before March rebounded to exceed $24,000,000 per day. As I mentioned earlier, BMD's first quarter gross margin percentage was 14.7%, down 40 basis points year over year.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

In particular, gross margin dollars were affected by lower sales volumes and decreased margins on commodity and EWP products. BMD's EBITDA margin was 4.5% for the quarter, down from the 5.6% reported in the year ago quarter, a reflection of lower gross margin dollar opportunity from slower sales activity and the associated deleveraging of our cost base. However, it is important to again reference the improved sales velocity in March, which resulted in EBITDA margins for that month similar to levels seen in recent quarters. Our BMD team continues to consistently provide high service levels across a broad mix of best in class products. We have spoken to in the past, periods like now where there is near term demand or price uncertainty allows us to again demonstrate the value proposition of two step distribution.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

I'm now on Slide nine. As we look forward to the second quarter, EWP volumes will be dependent upon new home sales and the pace at which builders begin new starts. Our EWP order files improved seasonally as we entered the second quarter, and we expect EWP volumes to increase by mid- to high single digits sequentially. On EWP pricing, we expect to experience low single digit sequential declines as competition per share persists. In plywood, we expect seasonal strengthening and a partial restart at Oakdale to result in mid single digit sequential volume increases.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

On plywood pricing, quarter to date realizations are consistent with our first quarter average. The partial operating status at Oakdale is expected to negatively impact our financial results by roughly $5,000,000 in the second quarter independent of market conditions. With regard to BMD sales, April's daily sales pace accelerated from the strengthening we saw in March and was approximately 13% higher than the first quarter twenty twenty five sales pace of 22,300,000 per day. Our daily sales pace for the balance of the quarter will be dependent upon end market demand and product pricing. Lastly, we expect approximately $38,000,000 in total company depreciation and amortization, a 26% effective tax rate, and we have 37,600,000 common shares outstanding as of April 30.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

I'm now on Slide 10. We had capital expenditures of $53,000,000 in the first quarter with $31,000,000 of spending in Wood Products and $22,000,000 of spending in BMD. Our capital spending range for 2025 remains between $220,000,000 and $240,000,000 This range includes additional spending on our multiyear investments in support of our EWP production capabilities in the Southeast that we have spoken to previously. At Oakdale, impacted machine centers are restarting in phases, and we are excited to have that facility fully operational again by the end of the second quarter. The Thorsby I line is expected to be operational in the first half of twenty twenty six.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

In BMD, we have made great progress on our greenfield distribution in Hondo, Texas, where construction is roughly 80% complete, and we look forward to its initial start up by the end of the third quarter. Speaking to shareholder returns. We paid $10,000,000 in regular dividends during the quarter. Our Board of Directors also recently approved dollars per share quarterly dividend on our common stock. Shareholders of record as of June 2 will receive payment of this dividend on June 18.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Through the first four months of twenty twenty five, we repurchased $71,000,000 of our common stock, dollars 54,000,000 in the first quarter and another $17,000,000 in April. Today, we have about 1,100,000.0 shares available for repurchase under our current share repurchase program. Not unexpectedly, our cash position declined in the first quarter due to seasonal increases in working capital and the previously referenced capital investments and shareholder returns. Our balance sheet remains strong, and we continue to be dedicated to a balanced deployment of capital by investing in our existing asset base, pursuing organic growth opportunities and returning capital to our shareholders. We also maintain the flexibility to execute M and A if opportunities emerge that align with our growth strategy.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

I will now turn it back over to Nate to share our business outlook and closing remarks.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Thanks, Kelly. I'm on slide number 11. Given the current environment, 2025 end market demand expectations remain difficult to predict, with most forecasts for housing ranging between flat to mid single digit declines. Our first quarter results impacted meaningfully by seasonal factors and our purposeful strategic investments are in no way a good indicator of how end market demand and our financial results will play out for the balance of 2025. But expectations for the remainder of the year are unclear as significant macroeconomic uncertainties and elevated mortgage rates have dampened consumer and homebuilder confidence.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

However, we do have great clarity is in the strength of our team and our ability to execute at a high level across all market conditions. We remain both steady and agile. We'll be prepared to respond as economic situation changes and remain resolute in our service to our customer and supplier partners. The long term demand drivers for our business remain strong, characterized by undersupply in housing units, aging U. S.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Housing stock and elevated levels of homeowner equity. The structural demand built into the housing market and our robust balance sheet provide us the ability to stay focused on the execution of our strategy and creation of long term value for our stakeholders. Thank you for joining us today and for your continued support and interest in Boise Cascade. We welcome any questions at this time. Rivka, would you please open the phone lines?

[Operator]

Thank you. At this time, we'll conduct a question and answer session. To ask a question, you will need to press 11 on your telephone and wait for your name to be announced. Our first question comes from the line of Susan Maklari of Goldman Sachs. Your line is now open.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Thank you. Good morning, everyone.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Good I

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

wanted to start on the general line side of the business. I guess, given the shifts in the macro that we've seen through the quarter, any thoughts on what you're hearing from some of your key suppliers there, positions of those inventories? And you also mentioned the benefit of a two step distribution model in this environment. I guess, what are you also hearing from customers and how are they leveraging that service there to help with their own inventories in the channel?

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Hey, Sue, it's Nate. I'll start the conversation and then Joe and Jeff and others can jump in as needed. I think overall, what we're seeing is that customers specific to the general line category are really dependent on two step distribution in terms of the auto warehouse support on units, job packs, pieces, maybe as compared to full heavy line direct shipments. So that auto warehouse support continues to remain a theme and we're seeing that in terms of both expectations from our suppliers in general line, as well as our customers in terms of how they're thinking about, to your point on their working capital positions. I think the other thing that we're experiencing with our general line, is really good, is their introduction of new products, new SKUs.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

And so that kind of creates a different maybe narrative in the marketplace where customers may be hesitant to bring some of those newer items in because they just don't know maybe the strength or the kind of the cadence of some of those new products. And so their dependency on two step distribution BMD remains very high. So I think overall, we're looked to as probably even more important today just in providing those just in time services as our customers are managing their working capital. And again, they're working that kind of risk and reward on having inventory levels both on demand and also on price realization. Overall it feels steady and consistent and again two step distribution is really an important part of that equation.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Okay, that's very helpful, Nate. And then you mentioned that the Oakdale project is progressing, it sounds like that's gone well. Any thoughts as you start to bring that back online relative to the macro environment that we're in and how you're positioned in terms of ramping that up?

[Troy Little, Executive Vice President of Wood Products at Boise Cascade Company]

Yeah, good morning, Susan. It's Troy.

[Troy Little, Executive Vice President of Wood Products at Boise Cascade Company]

Yeah, I mean, that comes back online, the majority of that veneer goes into our EWP side. So we've been buying veneer on the open market right now to supplement that. So when they come back online, that veneer will shift back into the EWP. There'll be some, let's say, limited plywood volume that will come along with that. But we'll just offset what we're buying on the open market and, and continue and then adjust to, you know, production is necessary depending on demand.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Okay. All right. That's helpful. And then I'm going squeeze one last one in, which is, you know, it was nice to see the comments on the capital allocation and, you know, potential for

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

the

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

buybacks. Can you talk a bit more, how you're thinking about, those priorities for this year, just given the world that we're in and anything of note on the M and A pipeline?

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yeah. Hi, Sue, this is Kelly. So nothing of note on the M and A pipeline. I think there's still some inbounds, but I think given kind of this near term uncertainty, I think it's been a little bit quieter in terms of inbounds of late, but we're still certainly interested to grow via M and A if that right opportunity presents itself. And then in terms of capital allocation in general, our script and our narrative is very much the same.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

We're excited about the good amount of organic project work we have ahead of us and we'll expect to continue to be opportunistically in a thoughtful way in the market regarding share repurchases.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

All right. Well, thank you all for the color and good luck with everything.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Thank you, Sue.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Thanks, Sue.

[Operator]

One moment for our next question. Our next question comes from the line of Kurt Yinger of D. A. Davidson. Your line is now open.

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

Great. Thanks and good morning everyone.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Good morning, Kurt.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Good morning, Kurt.

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

Wanted to start off on EWP pricing. Kelly, not to pin you down all that much, but I guess directionally, would you expect kind of Q2 versus Q1 sequential pressures to be kind of about the same or maybe even lessening a little bit? And then hoping you could also just talk a little bit more about the competitive dynamics. And as you've kind of moved into March and April and seen some seasonal strengthening, whether any of those pressures may be alleviating a little bit or if there's kind of a light at the end of the tunnel that you guys are seeing at this stage?

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yeah, sure, Kurt, I'll start and then maybe Nate and Troy, others can fill in. So in terms of the sequential guide, yeah, we did say low single digit again. I think we were off roughly 3% sequentially here

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

in the first

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

quarter. We still have May and June to come and it's still a very competitive environment out there. But yeah, I guess I would guide to a similar percentage to what we experienced in the first quarter in terms of sequential. But again, we'll see how May and June turn out. In terms of the kind of underlying activity, like I alluded to in my comments, the order file and AWP did seasonally strengthen pretty nicely here in April.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

But at the end of the day, we're still around a seasonally adjusted annual rate on single family housing starts that's probably less than a million, right? And so we're still in an environment where there's still competition for share. And so until we see more strength in the underlying demand, I think we'll need to see that before we see some levelization on pricing.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Hey, Curtis, maybe just to add to that. I think generally Q2 and the kind of the seasonal change represents where maybe there's overall less focus on pricing on a range of products and services and people really get centered on execution and serving the marketplace. So we'll see how that narrative plays out through the quarter. Generally and history would tell Us Second Quarter generally is again more execution focus less on kind of setting up programs and some of the details around that. I think the other narrative for us is on when it comes to homebuilder focus, they continue to stay focused on obviously their input costs, but also cycle times.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

And as you think about EWP and its ability to compete, and win relative to other options that are out there, whether it's dimensional lumber or even the play to floor trusses, EWP is certainly an answer in terms of affordability relative to open web trusses and also creates that kind of that speed and simplicity on the job site, which again remains important for the builder. So those would be maybe two backdrops as we transition into building season and we'll obviously be watching both of those carefully.

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

Got it.

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

Okay, that's helpful. Thank you. And then Kelly, just on the Oakdale impact, the $5,000,000 I assume that's on a year over year basis. And I guess with Troy's comments earlier around kind of buying open market veneer to supply EWP. Is that kind of cost differential contemplated in some of the numbers you've talked about related to this outage?

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

Would that be separate?

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yes, good question, Curt. So the first part, $5,000,000 is sequential. Expected impact is sequential in terms of the impact of Oakdale. And so we expect to continue to see some challenges there as we start up. Then in terms of the veneer, I spoke to I think $8,000,000 and $7,000,000 impacts on EBITDA from Oakdale.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

In fourth and first quarter, we were buying some amount of veneer. So there's not a lot of incremental cost of veneer impact into the second quarter. Was more of a year over year impact.

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

Okay, got it. Perfect. And then lastly, just on BMD, it sounds like general line is pretty stable. In terms of gross margin percentage, I guess, how much pressure are you seeing there in EWP? And if, I guess, we look at kind of the last two years outside of quarter to quarter noise, you guys have been kind of 15% plus on gross margin.

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

Is that still attainable for 2025 or given some of these dynamics is that maybe a little bit optimistic?

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yes, I think 15 is still certainly attainable and we're a little bit below that this quarter, didn't have a lot of opportunity on the commodity side and there was some competitive pressures. But I think definitely 15% is attainable given the mix shift we've seen and especially as we head here into the second and third quarter where you start to see a bit of a richer product mix typically. Short answer is yes on the 15%, Kurt.

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

Perfect. All

[Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies]

right. Thank you very much. Thank you. Thanks, Kurt.

[Operator]

One moment for our next question. Our next question comes from the line of George Staphos of Bank of America Securities. Your line is now open.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Hi, everyone. Good morning. Thanks for the details. Just a couple of quick ones to dig on to the existing question that were asked. Can you talk a little bit about the competitive pressures in EWP?

[George Staphos, Managing Director at Bank of America Merrill Lynch]

And are you seeing it more from existing engineered players? Or are you seeing it more because of or from either Dimensional or from folks producing Open Web Trusts? Secondly, and it sounds like everything is fine here, but in terms of the 13% improvement that you're seeing in daily sales so far in 2Q, any change or anything, any trend that we should be aware of in terms of mix, velocity? Again, it sounds like everything's fine, but just wanted to check that box, guys.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

So maybe on the EWP, me say, George just made this on the EWP side of things. I think what we're seeing is the narrative on two by 10s and open web trusses is largely consistent and steady, not a lot there. So where we generally see the competitive challenges is with EWP producers. And so that's something that we are committed to making sure we're competitive and in market each and every day for our customers, both our direct customers as well as through the channel. And so that's been the backdrop in terms of the competitive nature and that's been in place here for several quarters.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

So that would be probably kind of our current view on EWP and what we're seeing and what we're expecting there relative to competitive nature.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yeah, and then I guess the second part of your question, George was around the 13% sequential increase we've seen so far in the daily sales pace in BMD, which that math tells you it's about $25,000,000 a day through April compared to the 22,300,000.0 we experienced in the first quarter. I wouldn't say there's any big mix shift or anything like that. It's really just a function of the spring building season, better weather, and really out of the gates here pretty strong in April, which is great. If you do the math, 25,000,000 ish a day times sixty four days, you'll see BNB kick out $1,600,000,000 or so in revenue in the second quarter, which would be up $200,000,000 sequentially. And so you can that gives you a good sense of the gross margin dollar opportunity and the better leverage you can get on our cost base that we expect to put up certainly an improved number here in the second quarter of VMD.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Yes, Kelly, I appreciate that. What I was getting at and maybe could have posed the question differently, it seems like momentum has actually continued or accelerated. It's not like we're at 13%, but there's been a fade more recently. Was more or less just confirming that or not, if you want to comment. Can you give us along with that, can you give us a quick comment on the DOOR strategy, how that's working?

[George Staphos, Managing Director at Bank of America Merrill Lynch]

And are there any elements of the supply chain into BMD that we should be mindful of relative to tariffs? Any difficulties getting product that you need or you're in pretty good shape there? Thanks and good luck in the quarter.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yes. So yes, just a quick follow-up. Yes, so that pace I referenced has continued through the first few days in April and so we feel good about that. Then in terms of the doors and supply chain, I'll let Jeff lead the conversation there.

[Jeff Strom, Chief Operating Officer at Boise Cascade Company]

Yeah, hey, this is Jeff. On the door side, that strategy is going well. And I'll tell acquisitions we made, the newer shops, they're growing and you can see it. And when you greenfield one as we have, it's a process and it takes time and they certainly are. And then you have the acquisitions and they're obviously faster, but you can see them growing and then legacy ones we have, they've picked up significantly.

[Jeff Strom, Chief Operating Officer at Boise Cascade Company]

It's working just the way we want it.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Okay, and on tariffs and supply chain?

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

George, it's Nate. Yes, would say in tariffs, I would say overall for for Wood Products and BMD, there's kind of limited impact. For us, it's a pretty defined risk both in wood products. Most of our production, as you know, is US based. And so that doesn't really represent an issue for us in wood products given the current environment today.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

For distribution, as you know, our philosophy overall is to when we have to pass along pricing changes or cost increases that we experience, so tariffs would represent a very similar theme as to anything else that we would think about there. Specific to, there are some certain products as you think about in our general line, many of our metal products are imported and in some cases Georgia's limited options on where you can pull those materials from. So I guess the good news here is we have some familiarity with the story just given the COVID issues in terms of the resiliency and kind of the redundancy in some cases with our supply chain and that remains part of our plan going forward. But relatively the impact is very, very modest today and if anything would be general line just on some of those, again, of the metal products would be the area that we're currently focused.

[George Staphos, Managing Director at Bank of America Merrill Lynch]

Thanks so much, Nate. Good luck in the quarter guys.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Thanks.

[Operator]

One moment for our next question. Our next question comes from the line of Jeff Stephenson of Loop Capital. Your line is now open.

[Zack Pacheco, Equity Research Associate at Loop Capital]

Hey, good morning, guys. This is actually Zach Pacheco on for Jeff this morning.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Hey, Zach.

[Zack Pacheco, Equity Research Associate at Loop Capital]

Hey, how are guys doing? Maybe to start, given the current pricing environment, can you just provide some more color specifically on how you're looking at LVL kind of through the remainder of the year, more on the volume side?

[Zack Pacheco, Equity Research Associate at Loop Capital]

I believe last quarter share gains were called out as a positive. So just curious if there's any update from a share gain perspective. Thanks.

[Troy Little, Executive Vice President of Wood Products at Boise Cascade Company]

Yeah, as Kelly mentioned, Q1, we were down 3%, not quite as much as the housing starts. Also, he referenced the fact that so far starting into Q2, we're starting to see LVL in particular actually start outpacing our production. So we're starting to see our inventories come down there. And then as indicated, you know, we're still looking for that, you know, seasonal bump in volumes that we've indicated in the chart. Don't if you've got any more on that.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yeah, no, I think Troy covered it pretty well other than I guess I where I would add is that I think we've pretty consistently shown that our share of production as well as our volumes relative to single family starts have looked very strong. And again, we think that's very much a function of one having best in class products and best in class distribution tied together and we continue to believe that's the right approach.

[Zack Pacheco, Equity Research Associate at Loop Capital]

Understood. And then maybe just quickly on BMD, how attainable or how confident is the team on a sequential improvement in terms of EBITDA margins to add or above 5% in the next quarter, given the adverse weather you experienced in this quarter? Or do you think softer residential demand fundamentals are continuing to weigh on segment margins? Thanks.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yes. So yes, I feel good about and I alluded to this a bit in my comments that March, when we saw a more normal sales pace, we got our EBITDA margins back to what you've seen in recent quarters, kind of that mid five range, if you will. And so given where we've started in April and given the pace we've seen, we feel really good about our opportunity to again be in the mid fives for second quarter. A couple of other comments here from Joe.

[Jo Barney, EVP - Building Materials Distribution at Boise Cascade Company]

Yeah, hi there. As far as competitive positioning in the market, I think we're set up really well. Our national footprint allows us to shift our volume into pockets of strength across the country. It also helps us to service the national dealers who want and need consistent service across the country. We're aligned with many of the big builders and the dealers and their strength in times of market weakness, but at the same time, decentralized model allows us to support and serve the local and regional dealers and builders as well and be flexible to their needs.

[Jo Barney, EVP - Building Materials Distribution at Boise Cascade Company]

We've got great partnerships with our customers, with our suppliers, and really our integrated model with manufacturing, you know, is a key part of driving our success.

[Zack Pacheco, Equity Research Associate at Loop Capital]

Makes sense. Thanks for the color.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Thank you, Zach.

[Operator]

Our next question comes from the line of Ketan Mamtora of BMO Capital Markets. Your line is now open.

[Ketan Mamtora, Director - Building Products Equity Research at BMO Capital Markets]

Thank you, and good morning. Perhaps to start with, on Q2 EWP volumes, and if I'm doing my math correctly here, it sounds like on I joist, you know, volumes would be down about double digits on a year over year basis. You, Kelly, can you talk about sort of, you know, puts and takes, you know, what's kind of driving that, you know, sort of a pretty meaningful year over year decline in volume?

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yeah, I think it's really just a function of housing starts last year versus the housing start assumption for this year, Ketan. It's really that. It's not in my view a loss of market share or a change in usage in terms of floor products. It's not that. It's really just a function of the underlying market conditions today.

[Ketan Mamtora, Director - Building Products Equity Research at BMO Capital Markets]

I see. Okay, got it. And then if I look at your inventories at the end of Q1 versus kind of your total inventories at the end of Q1 of last year, it's again up like, I don't know, 1213%, something in that range. Can you sort of talk to how you sort of feel about the overall level of inventories given sort of

[Ketan Mamtora, Director - Building Products Equity Research at BMO Capital Markets]

the

[Ketan Mamtora, Director - Building Products Equity Research at BMO Capital Markets]

housing backdrop, which has been sort of choppier? We've talked about things off to a slower than expected start.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yeah, let me let Jeff kind of feel that initially the question around inventory and what we're seeing and what we were at here in the first quarter and relative to our expectations.

[Jeff Strom, Chief Operating Officer at Boise Cascade Company]

Hey, it's Jeff.

[Jeff Strom, Chief Operating Officer at Boise Cascade Company]

Yeah, our inventory position, know, feel good about it. When the winter buys came and opportunities for buys, fully took advantage of that. We needed that pretty heavily. We also look at it with the market that we're in right now, we know it is very much a distribution friendly market and people are relying on us. Our suppliers are relying on us to have and our customers rely on us to have and get them there on time.

[Jeff Strom, Chief Operating Officer at Boise Cascade Company]

We've leaned into that and made sure that we're stocked and ready for that. On the dealer side of things, what we're seeing out there without a doubt, it is lean overall. A couple areas where it might be heavy if they leaned in for tariffs, but overall it is lean and people are relying on distribution and we're ready to serve.

[Ketan Mamtora, Director - Building Products Equity Research at BMO Capital Markets]

Understood. That's helpful color. And then, you know, maybe last one Nate. There's been a couple of transactions here recently, one on kind of, one of your kind of supplier side and then one on the pro dealer side, pretty meaningful transaction. How do you sort of think about potential impact, if any, over the next several years here?

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Yeah, good question, Keaton. I think when it comes to your point, some of the consolidation that's taken place, both upstream and downstream from Boise Cascade, that has been a theme here over the past number of years and certainly is continuing and obviously in some important examples in front of us today. I think as we so we are, I think, well positioned in the marketplace and well positioned with those relationships. And I think the counsel that we continue to work internally and externally is we're going to stay really focused on the here now and execute at a very high level for the benefit of both those suppliers and what our customers deserve and expect going forward. So, I think we are in very important part of the equation for our suppliers and we got to continue to earn that each and every day, same with our customers.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

But the consolidation, those trends, we that those have been taking place, we expect those likely to take place going forward And that just really requires us to make sure that we're focused on executing at a very, very high level each and every day.

[Ketan Mamtora, Director - Building Products Equity Research at BMO Capital Markets]

Got it. That's very helpful. Good luck.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Thank you.

[Operator]

One moment for our next question. Our next question comes from the line of Reuben Garner of Benchmark. Your line is now open.

[Reuben Garner, Equity Research Analyst at The Benchmark Company LLC]

Thank you. Good morning, guys. Apologies if I repeat anything. I missed the first part of the call. Big picture question for you.

[Reuben Garner, Equity Research Analyst at The Benchmark Company LLC]

And correct me if I'm if I'm looking at this wrong, but I I think the volume for I joist and LVL is kind of round tripped back to pre 2020 levels for you guys, but on a higher level of starts. Is the difference between what you would have seen back then and today size and type of homes or is there some other dynamic? Are you guys thinking about your volume versus your price differently than maybe you did five or six years ago? Just any color there would be helpful.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Ruben, it's Nate. Question. I think in terms of what we're experiencing, I don't think it's anything in terms of kind of change I joists versus maybe open web or dimensional lumber, there can be some around the edges. I think much of that is probably around maybe home size and the home footprint, and also where that construction, where that start resides. So in some examples, for example, you're in a market like Phoenix, it's a slab on gray market, single story construction that represents a much different opportunity than compared to Denver, Colorado as an example where typically two story construction with a basement.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

So I think in terms of where that start resides and the strength that we've seen in the sunshine states, Florida's and Texas and Arizona, I think that's been a contributing factor in terms of what that real floor opportunity represents for I joist and framing materials here today in 2025.

[Reuben Garner, Equity Research Analyst at The Benchmark Company LLC]

And so Nate, as that relates to price, I mean, pricing is still up nicely since then. I know I'm sure you have a ton of areas of inflation in your own regard. But how we think about just kind of downside from here given where the volume environment is? What does the supply or capacity utilization for the industry look like today versus maybe what it did in that period five, six years ago?

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Yes. So capacity realization today for the first quarter for us, we ran a pretty strong rate given the environment. We were kind of between 7580%. And in April, were above that level. It was probably low 80s.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

And so I don't have 2019 in my still in my memory bank. But I think our operating rate relative to the demand environment today, feel good about. And again, having the connection between manufacturing and distribution is important.

[Reuben Garner, Equity Research Analyst at The Benchmark Company LLC]

Great. Thanks guys and good luck in this coming quarter.

[Kelly Hibbs, SVP, CFO, & Treasurer at Boise Cascade Company]

Thank you, Ruben.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Thanks, Ruben.

[Operator]

I'm showing no further questions at this time. I would now like to turn it back to Nate Jorgensen, CEO for closing remarks.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Great. Thanks. We appreciate everyone joining us this morning for our update and earnings call. Thank you for your continued interest and support of Boise Cascade. Be safe, be well.

[Nate Jorgensen, CEO & Director at Boise Cascade Company]

Thank you.

[Operator]

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

Participants

Executives

• Chris Forrey, Vice President of Finance & Investor Relations
• Nate Jorgensen, CEO & Director
• Kelly Hibbs, SVP, CFO, & Treasurer
• Troy Little, Executive Vice President of Wood Products
• Jeff Strom, Chief Operating Officer
• Jo Barney, EVP - Building Materials Distribution

Analysts

• Susan Maklari, Senior Equity Research Analyst at Goldman Sachs
• Kurt Yinger, SVP & Research Analyst at D.A. Davidson Companies
• George Staphos, Managing Director at Bank of America Merrill Lynch
• Zack Pacheco, Equity Research Associate at Loop Capital
• Ketan Mamtora, Director - Building Products Equity Research at BMO Capital Markets
• Reuben Garner, Equity Research Analyst at The Benchmark Company LLC