BOISE CASCADE Co Q4 FY2024 earnings call

• Accomplishments: Full-year net income $376.4 million ($9.57 per diluted share), growth in distribution via organic and acquisition, capital investments for EWP, and shareholder returns.
• Fourth quarter results: U.S. housing starts down, consolidated sales $1.6 billion (down 5% y-o-y), net income $68.9 million ($1.78 per share).
• First quarter expectations: EWP volumes modestly increase, EWP pricing low single-digit q-o-q decline; plywood Oakdale facility down first quarter, volumes mid to high single digits q-o-q decline, $7M cost impact; BMD sales pace 8% below fourth quarter.
• Capital expenditures: 2024: $230 million (BMD $108M). 2025 outlook: $220-240M, including EWP investments and BMD distribution centers.
• Shareholder returns: 2024: $220 million in dividends, $0.21 per share quarterly dividend approved.

Wood Products

• Fourth quarter sales including distribution: $419.7 million, down 7% from Q4 2023.
• Segment EBITDA: $56.6 million vs $92.7 million in prior year quarter. Decline due to lower EWP and plywood sales prices.
• LVL volumes: Up 11% y-o-y; I-joist volumes down 2% y-o-y. Sequential LVL and I-joist volumes down 8% and 10% respectively.
• Plywood: Sales volume 371 million feet (vs 363 million in Q4 2023), average net sales price $354, down 7% y-o-y but up 5% q-o-q.

BMD

• Fourth quarter sales: $1.4 billion, down 4% from Q4 2023.
• Segment EBITDA: $84.5 million vs $80.6 million in prior year quarter. Gross margin percentage up 60 basis points. General administrative expenses decreased by $3.6 million due to lower acquisition-related expenses.

• First quarter EWP volumes expected to increase modestly from fourth quarter, with EWP pricing showing low single-digit sequential declines.
• Plywood volumes expected to decline mid to high single digits sequentially, with $7 million negative cost impact from Oakdale downtime.
• BMD sales pace expected to strengthen as spring building season approaches, but quarter-to-date daily sales pace 8% below fourth quarter.
• 2025 capital spending expected to be between $220 million and $240 million, including investments in EWP production capabilities and BMD distribution centers.

• Weather causing unplanned downtime at manufacturing and distribution locations.
• Macroeconomic uncertainties and policy decisions affecting near-term demand.
• Potential impact of tariffs on Canadian supply and its effect on EWP and other products.
• Affordability challenges potentially leading to demand destruction.

Q: Kurt Yinger asked about Canadian supply relative to U.S. consumption and tariffs impact on Boise Cascade.

A: Nate Jorgensen and Kelly Hibbs responded that there are many unknowns with tariffs, but they are watching carefully and considering cost pressures and demand implications.

Q: Susan Maklari inquired about the operating environment, BMD margin, and capital allocation.

A: Jeff Strom discussed BMD general line competitiveness, and Kelly Hibbs spoke about capital allocation focusing on capital spending, opportunistic buybacks, and potential special dividends later in the year.

Q: Mike Roxland asked about BMD margin transition to 1Q and LVL growth.

A: Kelly Hibbs explained margin erosion in 1Q due to sales pace decline, and Nate Jorgensen and Kelly Hibbs highlighted LVL growth from combined sales team efforts and steady application opportunities.

Q: George Staphos asked about EWP demand, price erosion, and inventory.

A: Kelly Hibbs stated price erosion is from EWP competition, and Jeff Strom mentioned favorable inventory position due to customer reliance on warehouse stock.

Q: Ketan Mamtora inquired about M&A pipeline and product categories.

A: Kelly Hibbs and Nate Jorgensen indicated interest in M&A, more potential on the distribution side, and focus on customer and supplier needs aligning with strategy.