Boise Cascade Company Reports Fourth Quarter and Full Year 2023 Results

Boise Cascade Company (“Boise Cascade,” the “Company,” “we,” or “our”) reported fourth quarter net income of $97.5 million, or $2.44 per share, on sales of $1.6 billion. For the full year 2023, Boise Cascade reported net income of $483.7 million, or $12.12 per share, on sales of $6.8 billion. For 2022 comparative results, see the table below.

“We closed out 2023 with a fourth quarter that delivered strong financial performance, further execution of our growth strategies through organic and acquisition initiatives, and meaningful returns to our shareholders through share price gains and dividends. I remain humbled and grateful for our team as we continue to execute on strategies that position us to serve and support our vendor and customer partners into the future,” stated Nate Jorgensen, CEO. “As we look forward to 2024, we are optimistic about new single-family residential construction activity and have great confidence in our people to execute our strategy independent of the market backdrop. In addition, our balance sheet remains strong, and we remain committed to our balanced approach to capital allocation and look forward to executing our reinvestment and growth projects included in our expanded capital plan.”

Fourth Quarter and Year End 2023 Highlights

In fourth quarter 2023, total U.S. housing starts and single-family housing starts increased 4% and 23%, respectively, compared to the same period in 2022. For the full year 2023, total and single-family housing starts decreased 9% and 6%, respectively, compared to the same period in 2022. Single-family housing starts are the key demand driver for our sales.

Wood Products

Wood Products’ sales, including sales to Building Materials Distribution (BMD), increased $24.1 million, or 6%, to $449.7 million for the three months ended December 31, 2023, from $425.6 million for the three months ended December 31, 2022. The increase in sales was driven by higher sales volumes for I-joists and LVL (collectively referred to as EWP). The increase was offset partially by lower sales prices across all product lines and lower plywood sales volumes. Wood Products’ segment income decreased $10.9 million to $64.1 million for the three months ended December 31, 2023, from $75.0 million for the three months ended December 31, 2022. The decrease in segment income was due primarily to lower EWP and plywood sales prices, accelerated depreciation of $6.2 million for the previously announced indefinite curtailment of lumber production at our Chapman, Alabama facility, and an increase in other manufacturing costs. These decreases in segment income were offset partially by higher EWP sales volumes and lower wood fiber costs.

For the year ended December 31, 2023, sales, including sales to BMD, decreased $183.3 million, or 9%, to $1,932.6 million from $2,115.9 million in 2022. The decrease in sales was driven by lower sales prices across all product lines and lower EWP sales volumes. These decreases were offset partially by higher plywood sales volumes. Wood Products’ segment income decreased $238.1 million to $337.1 million for the year ended December 31, 2023, from $575.2 million for the year ended December 31, 2022. The decrease in segment income was due primarily to lower plywood and EWP sales prices, as well as lower EWP sales volumes. In addition, segment income was negatively impacted by an increase in depreciation and amortization expense related to the Coastal Plywood acquisition and accelerated depreciation on lumber production assets, as mentioned above. These decreases in segment income were offset partially by lower wood fiber costs and higher plywood sales volumes.

Building Materials Distribution

BMD’s sales increased $48.8 million, or 3%, to $1,492.6 million for the three months ended December 31, 2023, from $1,443.8 million for the three months ended December 31, 2022. Compared with the same quarter in the prior year, the increase in sales was driven by sales volume increases of 13%, offset partially by sales price decreases of 10%. By product line, commodity sales decreased 8%, general line product sales increased 13%, and EWP sales (substantially all of which are sourced through our Wood Products segment) increased 10%. BMD segment income decreased $22.0 million to $70.5 million for the three months ended December 31, 2023, from $92.5 million for the three months ended December 31, 2022. The decline in segment income was driven by increased selling and distribution expenses of $12.9 million compared with the same quarter in the prior year. In addition, general and administrative expenses increased $5.7 million, due partially to acquisition-related costs for the previously announced BROSCO acquisition. Depreciation and amortization expenses also increased $3.2 million due primarily to increased capital expenditures, as well as the BROSCO acquisition. BMD’s gross margins were flat when compared with the same quarter in the prior year.

For the year ended December 31, 2023, sales decreased $1,464.9 million, or 19%, to $6,178.7 million from $7,643.6 million in 2022. The decrease in sales was driven by sales price and sales volume decreases of 16% and 3%, respectively. By product line, commodity sales decreased 32%, general line product sales decreased 4%, and EWP sales decreased 16%. BMD segment income decreased $291.3 million to $335.8 million for the year ended December 31, 2023, from $627.1 million for the year ended December 31, 2022. The decrease in segment income was driven by a gross margin decrease of $276.0 million, resulting primarily from gross margin declines on EWP and commodity products and lower sales volumes across all product lines compared with 2022. In addition, general and administrative expenses increased $7.8 million, due partially to acquisition-related costs for the BROSCO acquisition. Depreciation and amortization expenses also increased $5.3 million due primarily to increased capital expenditures, as well as the BROSCO acquisition.

Balance Sheet and Liquidity

Boise Cascade ended fourth quarter 2023 with $949.6 million of cash and cash equivalents and $395.9 million of undrawn committed bank line availability, for total available liquidity of $1,345.5 million. The Company had $445.3 million of outstanding debt at December 31, 2023.

Capital Allocation

During the year ended December 31, 2023, the Company used a combined $378.2 million of cash for capital spending and the acquisition of BROSCO. We expect capital expenditures in 2024, excluding potential acquisition spending, to total approximately $250 million to $270 million. Our 2024 capital expenditures range includes spending on previously announced projects to add I-joist production capabilities at our Thorsby EWP mill and converting a plywood layup line to a parallel laminated veneer line at our Chapman, Alabama plywood facility. At our Oakdale, Louisiana facility, multiple investment projects are planned over the next two years which include upgrade and redesign of the log utilization center, a new veneer dryer and press, and modification of an existing veneer dryer. In addition, our 2024 capital expenditures range includes spending on the previously announced greenfield distribution centers in Texas and South Carolina in our BMD segment.

For the year ended December 31, 2023, the Company paid common stock dividends of $346.5 million, or $8.70 per share. In addition, on February 6, 2024, our board of directors declared a quarterly dividend of $0.20 per share on our common stock, payable on March 15, 2024, to stockholders of record on February 23, 2024.

For the year ended December 31, 2023, the Company paid $6.4 million for the repurchase of 75,678 shares of our common stock. As of December 31, 2023, approximately 1.9 million shares were available for repurchase under our existing share repurchase program.

For full results click here.

About Boise Cascade

Boise Cascade Company is one of the largest producers of engineered wood products and plywood in North America and a leading U.S. wholesale distributor of building products. For more information, please visit our website at www.bc.com.

Contact:

Lisa Tschampl – Media Contact – mediarelations@bc.com

Source: Boise Cascade Company