Boise Cascade Company Reports Third Quarter 2024 Results

Boise Cascade Company (“Boise Cascade,” the “Company,” “we,” or “our”) reported net income of $91.0 million, or $2.33 per share, on sales of $1.7 billion for the third quarter ended September 30, 2024, compared with net income of $143.1 million, or $3.58 per share, on sales of $1.8 billion for the third quarter ended September 30, 2023.

“In what has proven to be a moderate demand environment, once again, we were able to deliver good financial results in the third quarter. We could not have done this without the tremendous efforts of our associates and our unique combination of best-in-class engineered wood products and an unmatched nationwide wholesale distribution network,” stated Nate Jorgensen, CEO. “In addition, we continue to progress on our key strategic investment initiatives and thoughtfully deploy capital to shareholders. Looking forward, we expect normal seasonality through the winter months, and are well positioned to serve and support our customer and vendor partners as changes in demand dictate.”

Third Quarter 2024 Highlights

In third quarter 2024, total U.S. housing starts and single-family housing starts decreased 3% and 1%, respectively, compared to the same period in 2023. On a year-to-date basis through September 2024, total housing starts decreased 3%, while single-family housing starts increased 10%, compared to the same period in 2023. Single-family housing starts are the key demand driver for our sales.

Wood Products

Wood Products’ sales, including sales to Building Materials Distribution (BMD), decreased $61.3 million, or 12%, to $453.9 million for the three months ended September 30, 2024, from $515.2 million for the three months ended September 30, 2023. The decrease in sales was driven by lower plywood sales prices, as well as lower sales prices for LVL and I-joists (collectively referred to as EWP). In addition, lower sales volumes for I-joists decreased sales, while sales volumes for LVL and plywood were flat. Other sales related to lumber and residual byproducts also decreased.

Wood Products’ segment income decreased $45.7 million to $53.9 million for the three months ended September 30, 2024, from $99.6 million for the three months ended September 30, 2023. The decrease in segment income was due primarily to lower EWP and plywood sales prices, as well as higher conversion costs. In addition, lower I-joist sales volumes contributed to the decrease in segment income.

Building Materials Distribution

BMD’s sales decreased $102.8 million, or 6%, to $1,567.5 million for the three months ended September 30, 2024, from $1,670.3 million for the three months ended September 30, 2023. Compared with the same quarter in the prior year, the overall decrease in sales was driven by a sales price decrease of 6%, as sales volumes were flat. Excluding the impact of the BROSCO acquisition on October 2, 2023, sales would have decreased by 9%. By product line, commodity sales decreased 12%, general line product sales increased 4%, and EWP sales (substantially all of which are sourced through our Wood Products segment) decreased 14%.

BMD segment income decreased $22.3 million to $74.8 million for the three months ended September 30, 2024, from $97.1 million for the three months ended September 30, 2023. The decrease in segment income was driven by increased selling and distribution expenses and depreciation and amortization expense of $10.0 million and $5.1 million, respectively. In addition, gross margin decreased $7.7 million, driven by lower margins on commodity products and EWP, offset partially by improved margins on general line products.

Balance Sheet and Liquidity

Boise Cascade ended third quarter 2024 with $761.6 million of cash and cash equivalents and $395.7 million of undrawn committed bank line availability, for total available liquidity of $1,157.3 million. The Company had $450.0 million of outstanding debt at September 30, 2024.

Capital Allocation

We expect capital expenditures in 2024, excluding potential acquisition spending, to total approximately $220 million to $240 million. In addition, we expect capital expenditures in 2025 to total approximately $200 million to $220 million. These levels of capital expenditures could increase or decrease as a result of several factors, including acquisitions, efforts to further accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, availability of engineering and construction resources, and timing and availability of equipment purchases.

For the nine months ended September 30, 2024, the Company paid $220.5 million in common stock dividends. On October 30, 2024, our board of directors declared a quarterly dividend of $0.21 per share on our common stock, payable on December 18, 2024, to stockholders of record on December 2, 2024.

For the three and nine months ended September 30, 2024, the Company paid $69.7 million and $158.5 million, respectively, for the repurchase of 554,500 and 1,232,345 shares of our common stock, respectively. Furthermore, in October 2024, the Company repurchased an additional 50,000 shares of our common stock at a cost of $6.9 million. On October 30, 2024, our board of directors authorized the repurchase of an additional 1.4 million shares of our common stock. This increase is in addition to the remaining authorized shares under our prior common stock repurchase program. As of October 31, 2024, approximately 2 million shares were available for repurchase under our existing share repurchase program.

Outlook

Demand for the products we manufacture, as well as the products we purchase and distribute, is correlated with new residential construction, residential repair-and-remodeling activity, and light commercial construction. Residential construction, particularly new single-family construction, is the key demand driver for the products we manufacture and distribute. As reported by the U.S. Census Bureau, housing starts were 1.42 million in 2023. Current industry forecasts for U.S. housing starts are approximately 1.35 million in 2024 followed by 2025 starts at or modestly above 1.40 million. For the nine months ended September 2024, single-family starts are outpacing 2023 levels by 10% whereas multi-family starts have declined sharply from historic levels due to increased capital costs for developers, combined with historic levels of multi-family unit completions in 2024. Home affordability remains a challenge for many consumers due to home prices and the cost of financing, with the level of mortgage rates also limiting the supply of existing housing stock available for sale. Large homebuilders are addressing affordability challenges by reducing home sizes and plan complexity, as well as offering mortgage rate buydowns. New residential construction will continue to be an important source of supply for the demand created by undersupplied housing, favorable demographic trends, and low unemployment. We expect 2025 to reflect modest growth in home improvement spending, as the age of U.S. housing stock and elevated levels of homeowner equity will continue to provide a favorable backdrop for repair-and-remodel spending. Ultimately, macroeconomic factors, the level and expectations for mortgage rates, home affordability, home equity levels, home size, and other factors will influence the near-term demand environment for the products we manufacture and distribute.

As a manufacturer of certain commodity products, we have sales and profitability exposure to declines in commodity product prices and rising input costs. Our distribution business purchases and resells a broad mix of products with periods of increasing prices providing the opportunity for higher sales and increased margins, while declining price environments expose us to declines in sales and profitability. Future product pricing, particularly commodity products pricing and input costs, may be volatile in response to economic uncertainties, industry operating rates, supply-related disruptions, transportation constraints or disruptions, net import and export activity, inventory levels in various distribution channels, and seasonal demand patterns.

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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