BOISE CASCADE Co Q4 FY2025 earnings call

Nate Jorgensen reflected on 2025, noting strong operating results despite market headwinds, expansion of distribution business with greenfield center and acquisition of Holden Humphrey, multiyear investments in EWP production, and shareholder returns. Kelly Hibbs walked through segment financial results, discussed legal matter in BMD, capital expenditures in 2025 and outlook for 2026, and first quarter guidance. Jeff Strom welcomed Holden Humphrey acquisition, discussed business outlook for 2026, focus on maintaining focus and adaptability, and thanked Nate for his leadership.

BMD sales in Q4 were $1.4 billion, down 5% y-o-y; segment EBITDA was $56.4 million, down from $84.5 million prior year. Gross margin dollars decreased $21.3 million. Wood Products sales in Q4 were $354 million, down 16% y-o-y; segment EBITDA was $12.3 million, down from $56.6 million prior year. BMD's Q4 sales decline was due to 4% price decrease and 1% volume decrease. Wood Products' EBITDA decrease was due to lower EWP sales prices, volumes, plywood sales prices, and higher per-unit conversion costs. BMD's Q4 gross margin was 15.1%, flat seq and down 70 basis points y-o-y. BMD's EBITDA margin was 4.1% in Q4. Wood Products' Q4 I-joist and LVL volumes were down 16% and 7% y-o-y. Plywood sales volume in Q4 was 354 million feet, down from 371 million feet in prior year Q4. Tariffs led to decrease in South American plywood imports to US.

For BMD, first quarter EBITDA is estimated to be between $45 million and $55 million, daily sales pace is ~6% below Q4, gross margins expected to be between 14.25% and 15%. For Wood Products, first quarter EBITDA is estimated to be between $25 million and $35 million, EWP volumes expected to increase high single to low double digits seq, EWP pricing expected flat to low single-digit decline seq, plywood expected sequential volume increases in high single digits, per unit manufacturing costs expected to decrease seq, first quarter effective tax rate expected between 26% and 27%.

BMD's fourth quarter EBITDA was negatively impacted by ~$6 million after tax related to accrual for legal proceedings. Trade policy remains uncertain following Supreme Court decision which could affect market dynamics. Winter Storm Fern caused disruptions in Eastern US operations with BMD branches closed and Southeast manufacturing facilities closed, and recent severe weather in Northeast impacting distribution operations.

Q: Can you talk about share gains in general line within BMD?

A: Joe Barney said general line products had strong demand in 2025, continued growth with certain partners, home center business strong, and confidence in gaining market share in door and millwork category.

Q: Thoughts on EWP and channel positioning for upcoming season?

A: Troy Little said aligned with partners, saw restocking starting in Q1 and feeling good about year-to-date, strong partnerships allow access to market.

Q: Areas Jeff Strom is focused on as CEO?

A: Jeff Strom said strategic priorities in place, slight refinement, leveraging integrated model, looking for efficiencies, innovation, technology investment, and becoming employer of choice.

Q: EWP price stability and competitive backdrop?

A: Troy Little said Q4 was flat seq, competitive but playing out, Q1 expected to be flat, costs have been going up as prices came down.

Q: 1Q guidance and EBITDA margin increase?

A: Troy Little said projects complete and site improvement plans contribute. Kelly Hibbs said first quarter seasonally weaker, mix shift affects gross margin.

Q: BMD EBITDA margin back to 5%?

A: Kelly Hibbs said first quarter seasonally weaker, second and third quarters expected to be back to 5%, mix and direct sales affect gross margin.

Q: Inventories and doors/millwork business?

A: Jeff Strom said general line inventories still lean, people rely on next-day service; Joe Barney said door shops are doing well, expanding space, improving capacity, focusing on pre-finished business.

Q: Holden Humphrey acquisition impact and M&A pipeline?

A: Joanna Barney said acquisition meeting expectations, gaining access to new segments and product categories, pipeline still active, balanced approach to M&A and share repurchases.

Q: What went better than expected to close year and guidance going forward?

A: Kelly Hibbs said BMD had better activity and cost control, Jeff Strom said high reliance on warehousing in December.

Q: Customers' cautiousness and growth in channels?

A: Joanna Barney said focus on general line mix, commodity performance, door shops' growth, and strategic investments driving growth.