Boise Cascade Company Q1 FY2026 earnings call

Jeff expresses confidence in the company, talent, and direction. Mentions continued demand uncertainty from geopolitical events, volatile mortgage rates, and severe weather. Company leverages integrated model. Resolved a legacy legal matter and strengthened processes. Kelly walks through segment financial results, capital allocation priorities, and second quarter guidance. Jeff talks about U.S. housing starts, challenges of consumer sentiment and home affordability, and business outlook, including confidence in structural drivers of U.S. housing demand.

Total U.S. housing starts increased 1% compared to prior year quarter, but single-family housing starts were off 5%. Consolidated first quarter sales were $1.5 billion, down 2% from first quarter 2025. Net income was $17.8 million, or $0.50 per share, vs $40.3 million, or $1.06 per share, in year-ago quarter. B&B sales in quarter were $1.4 billion, down 1% from first quarter 2025, with segment EBITDA $48.2 million vs $62.8 billion prior year. Wood products sales $398.2 million, down 4% vs prior year, segment EBITDA $32 million vs $40.2 million prior year. BMD year-over-year first quarter sales decline 1% driven by net sales price decreases 3% offset by net sales volume increases 2%. First quarter EWP sales prices declined about 7% year-over-year but remained flat sequentially. Plywood sales volume 373 million feet vs 363 million feet prior year, average net sales price $343 per thousand, up 1% year over year and 4% sequentially.

For BMD, second quarter EBITDA estimated between 65 and 80 million, daily sales pace ~15% above first quarter's $22 million per day, gross margins expected between 14.25% and 15%. For wood products, second quarter EBITDA estimated between $32 and $47 million, EWP order files showing seasonal strength, sales volumes expected to increase mid-single digits sequentially, EWP pricing expected flat to low single-digit declines sequentially, plywood expected sequential volume increases mid-single digits, per-unit manufacturing costs comparable to first quarter.

Geopolitical events, volatile mortgage rates, severe weather causing demand uncertainty. Legacy legal matter's process inadequacy. Brazilian imports of plywood potentially influencing market dynamics. Transportation costs, diesel prices, resin costs inflationary pressures. Consumer sentiment and home affordability challenging residential construction activity.

Q: Mike Roxland asked about Brazilian imports of plywood and EWP price stability.

A: Kelly said they're expecting more Brazilian plywood, Jeff added some has showed up but not significant. Troy said EWP pricing held flat since Q3 last year due to strategic, regional conversations and strong order file.

Q: Ketan Mamtora asked about transportation inflation and second quarter EBITDA guidance.

A: Troy talked about diesel prices, resin costs, and distribution's fuel surcharges. Kelly explained BMD's EBITDA range due to uncertain in-market demand and cost inputs, wood products' range due to forecasting challenges and cost inputs.

Q: Susan McLaury asked about mix of sales from warehouse vs direct and General Line supplier dynamics.

A: Jeff said there's a shift to distribution, Joe said suppliers had 25 - 30 price increases, some surcharge driven, some product price increases.

Q: Kurt Inger asked about BMD volume performance and gross margin in back half.

A: Joe said both product category and customer initiatives are bearing fruit, like home center special order growth, door segment gains, digital strategy, and commodity system benefits. Joe also talked about margin impacts and opportunities in back half based on interest rates and seasonality.

Q: George Staffos asked about cost of goods inflation recovery and plywood Brazil imports.

A: Kelly spoke to cost input increases in wood products, Jeff said Brazil imports haven't had big effect yet but could due to supply and demand, and spread was about 10% initially.

Q: Jeff Stevenson asked about EWP restocking and Thorsby line ramp.

A: Troy said restocking contributed to EWP sequential volumes, Thorsby line is in testing phase, sellable product expected in early third quarter.

Q: Ruben Garner asked about EWP price-cost dynamics and BMD general line inventory.

A: Troy said EWP flat to low single-digit sequential declines due to competitive environment and freight impact. Joe said margin compression in general line mostly market-based, channel inventories are lean but stable.

Q: Ruben Garner also asked about BMD general line margin and inventory.

A: Joe said margin pressure in general line mostly on engineered wood abating, channel inventories normalizing.

Q: Kurt Yinger asked about EWP price conversations and BMD second quarter outlook.

A: Troy said hard to sort restock vs end market in Q1, second quarter not expecting big seasonal increase due to home builder focus on sell side and build to order.