Boise Cascade Company Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Housing Market: September 2025 U.S. housing starts data not released, but July-August 2025 housing starts up 2% y/y, single-family down 3% y/y.
• Financials: Consolidated third quarter sales $1.7 billion, down 3% y/y. Net income $21.8 million vs $91 million y/y.
• Capital Allocation: Capital expenditures $187 million in 9 months ended September 2025. Expect 2026 capital spending $150-$170 million. Paid $27 million in regular dividends in 9 months ended September 30, 2025. Board approved $0.22 per share quarterly dividend. Repurchased ~$120 million of stock in 10 months of 2025, with new $300 million repurchase program authorized.
• Distribution Centers: Opened greenfield distribution center in Hondo, Texas in August 2025.

Segment Performance

• Wood Products: Third quarter sales were $396.4 million, down 13% compared to third quarter 2024. Segment EBITDA was $14.5 million, down from $77.4 million in the year-ago quarter. I-joist and LVL volumes were down 10% and 7% respectively compared to the year-ago quarter. EWP volumes were down 15% sequentially. Plywood sales volume was 387 million feet, down slightly year-over-year but up 9% sequentially. Pricing pressures were a factor.
• BMD: Third quarter sales were $1.6 billion, down 1% from third quarter 2024. Segment EBITDA was $69.8 million, down from $87.7 million in the prior year quarter. Commodity sales decreased 3%, general line product sales increased 6%, and EWP sales decreased 11%. Gross margin was 15.1%, a 60 basis point year-over-year decline.

Guidance

• Fourth Quarter Wood Products: Estimated EBITDA between breakeven and $15 million. EWP volumes expected to decline low double digits to mid-teens q/q. EWP prices expected low single-digit q/q decline. Plywood volumes expected down near double digits q/q. Maintenance and capital project-related downtime in fourth quarter.
• Fourth Quarter BMD: Estimated EBITDA between $40 million and $55 million. Daily sales pace in October ~5% below third quarter. Tax rate expected between 26%-27% in fourth quarter.

Risks

• Demand weakness
• Trade policy uncertainties
• Seasonal factors
• Pricing volatility for plywood, lumber, and other commodities
• Inventory management challenges related to market demand

Question and Answer

• Q: Susan Maklari on general line business share gains and EWP pricing A: Joe Barney discussed general line product demand holding up, investments in capacity, working with partners, and market share gains. Troy Little and Nate Jorgensen talked about EWP pricing stabilizing, expecting price improvement in 2026.
• Q: Michael Roxland on BMD margins and mill profitability A: Nathan Jorgensen and Joanna Barney discussed maintaining BMD gross margins, growing general line products for margin opportunity, and Troy Little mentioned cost improvement activities at mills for future profitability.
• Q: Kurt Yinger on EWP competitive dynamics and inventory A: Troy Little and Nathan Jorgensen discussed EWP competitive dynamics stabilizing, channel inventory balance, and potential market tension in spring 2026 if unexpected demand or supply issues arise.
• Q: Jeff Stevenson on Oakdale facility impact and partnerships A: Troy Little talked about Oakdale facility operational inefficiencies and improvement plans. Joanna Barney discussed partnerships with James Hardie and ongoing efforts to expand partnerships for general line growth.
• Q: Reuben Garner on BMD EBITDA margin and inventory A: Kelly Hibbs explained BMD EBITDA margin dip is seasonal, and inventory increase is due to distribution investments and readiness for market recovery.
• Q: Ketan Mamtora on EWP volumes and general line growth A: Troy Little discussed EWP volume consistency and share gains. Joanna Barney and Nathan Jorgensen talked about general line growth through market share gains, new SKUs, and partnerships with suppliers