Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE:BCC) today reported net income of $112.3 million, or $2.84 per share, on sales of $1.8 billion for the second quarter ended June 30, 2024, compared with net income of $146.3 million, or $3.67 per share, on sales of $1.8 billion for the second quarter ended June 30, 2023.

"Our team delivered solid financial performance in the second quarter while operating in a somewhat tepid demand environment influenced by elevated mortgage rates and economic uncertainties. In addition, spending on our organic growth projects progressed as expected and returns of capital to our shareholders were again in clear focus, including the recent announcement of a meaningful special dividend that will fund in September," stated Nate Jorgensen, CEO. "While the near-term demand environment is uncertain, I remain confident in our ability to deliver quality results through the second half of the year. Our proven team will accomplish this by leveraging our outstanding manufacturing and wholesale distribution network, and our relentless drive to deliver superior value to our customer and vendor partners."

Second Quarter 2024 Highlights

	2Q 2024		2Q 2023		% change
	(in thousands, except per-share data and percentages)
Consolidated Results
Sales	$	1,797,670	$	1,815,219	(1	)%
Net income		112,292		146,320	(23	)%
Net income per common share - diluted		2.84		3.67	(23	)%
Adjusted EBITDA ¹		181,207		220,976	(18	)%
Segment Results
Wood Products sales	$	489,823	$	530,273	(8	)%
Wood Products income		72,780		104,035	(30	)%
Wood Products EBITDA ¹		95,050		127,040	(25	)%
Building Materials Distribution sales		1,655,221		1,636,538	1	%
Building Materials Distribution income		85,400		98,550	(13	)%
Building Materials Distribution EBITDA ¹		97,141		105,936	(8	)%
¹For reconciliations of non-GAAP measures, see summary notes at the end of this press release.

In second quarter 2024, total U.S. housing starts decreased 7%, while single-family housing starts increased 7%, compared to the same period in 2023. On a year-to-date basis through June 2024, total housing starts decreased 3%, while single-family housing starts increased 16%, 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 $40.5 million, or 8%, to $489.8 million for the three months ended June 30, 2024, from $530.3 million for the three months ended June 30, 2023. The decrease in sales was driven by lower plywood sales volumes, as well as lower sales prices for LVL and I-joists (collectively referred to as EWP). Other sales related to lumber and residual byproducts also decreased. These decreases were offset partially by increased sales volumes for EWP.

Comparative average net selling prices and sales volume changes for EWP and plywood are as follows:

	2Q 2024 vs. 2Q 2023	2Q 2024 vs. 1Q 2024

Average Net Selling Prices
LVL	(7)%	(2)%
I-joists	(6)%	(3)%
Plywood	(1)%	(4)%
Sales Volumes
LVL	8%	6%
I-joists	5%	16%
Plywood	(13)%	3%

Wood Products' segment income decreased $31.3 million to $72.8 million for the three months ended June 30, 2024, from $104.0 million for the three months ended June 30, 2023. The decrease in segment income was due primarily to lower EWP sales prices, as well as higher wood fiber and conversion costs. These decreases in segment income were offset partially by higher EWP sales volumes.

Building Materials Distribution

BMD's sales increased $18.7 million, or 1%, to $1,655.2 million for the three months ended June 30, 2024, from $1,636.5 million for the three months ended June 30, 2023. Compared with the same quarter in the prior year, the overall increase in sales was driven by sales volume increases of 2%, offset partially by sales price decreases of 1%. Excluding the impact of the BROSCO acquisition on October 2, 2023, sales would have decreased by 2%. By product line, commodity sales decreased 6%, general line product sales increased 8%, and EWP sales (substantially all of which are sourced through our Wood Products segment) decreased less than 1%.

BMD segment income decreased $13.2 million to $85.4 million for the three months ended June 30, 2024, from $98.6 million for the three months ended June 30, 2023. The decrease in segment income was driven by increased selling and distribution expenses and depreciation and amortization expense of $10.9 million and $4.4 million, respectively. These decreases were offset partially by decreased general and administrative expenses of $2.0 million. Gross margins were flat when compared with the same quarter in the prior year.

Balance Sheet and Liquidity

Boise Cascade ended second quarter 2024 with $922.1 million of cash and cash equivalents and $395.7 million of undrawn committed bank line availability, for total available liquidity of $1,317.8 million. The Company had $445.7 million of outstanding debt at June 30, 2024.

Capital Allocation

We expect capital expenditures in 2024, excluding potential acquisition spending, to total approximately $250 million to $270 million.

On August 1, 2024, our board of directors declared a quarterly dividend of $0.21 per share, as well as a special dividend of $5.00 per share, on our common stock. The dividends will be paid on September 16, 2024, to stockholders of record on September 3, 2024.

For the six months ended June 30, 2024, the Company paid $88.9 million for the repurchase of 677,845 shares of our common stock. Furthermore, in July 2024, the Company repurchased 90,000 shares of our common stock at a cost of $10.5 million. As of July 31, 2024, approximately 1.2 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. Current industry forecasts for 2024 U.S. housing starts are slightly below actual housing starts of 1.42 million in 2023, as reported by the U.S. Census Bureau. Home affordability remains a challenge for many consumers due to the cost of housing, as well as persistent elevated mortgage rates. However, with low unemployment, an undersupply of existing housing stock available for sale, and favorable demographic trends, new residential construction is expected to remain an important source of supply for homebuyers. Multi-family starts have declined sharply from historic levels due to increased capital costs for developers, combined with elevated supply. Regarding home improvement spending, 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. However, while home improvement spending is expected to remain healthy compared to history, renovation spending has softened due to consumer uncertainty, labor availability, higher borrowing costs, and building material inflation. Ultimately, macroeconomic factors, the level and expectations for mortgage rates, home affordability, home equity levels, home size, and other factors will likely 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.

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 the Company's website at www.bc.com.

Webcast and Conference Call

Boise Cascade will host a webcast and conference call to discuss second quarter earnings on Tuesday, August 6, 2024, at 11 a.m. Eastern.

To join the webcast, go to the Investors section of our website at www.bc.com/investors and select the Event Calendar link. Analysts and investors who wish to ask questions during the Q&A session can register for the call here.

The archived webcast will be available in the Investors section of Boise Cascade's website.

Use of Non-GAAP Financial Measures

We refer to the terms EBITDA and Adjusted EBITDA in this earnings release and the accompanying Quarterly Statistical Information as supplemental measures of our performance and liquidity that are not required by or presented in accordance with generally accepted accounting principles in the United States (GAAP). We define EBITDA as income before interest (interest expense and interest income), income taxes, and depreciation and amortization. Additionally, we disclose Adjusted EBITDA, which further adjusts EBITDA to exclude the change in fair value of interest rate swaps.

We believe EBITDA and Adjusted EBITDA are meaningful measures because they present a transparent view of our recurring operating performance and allow management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. We also believe EBITDA and Adjusted EBITDA are useful to investors because they provide a means to evaluate the operating performance of our segments and our Company on an ongoing basis using criteria that are used by our management and because they are frequently used by investors and other interested parties when comparing companies in our industry that have different financing and capital structures and/or tax rates. EBITDA and Adjusted EBITDA, however, are not measures of our liquidity or financial performance under GAAP and should not be considered as alternatives to net income, income from operations, or any other performance measure derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. The use of EBITDA and Adjusted EBITDA instead of net income or segment income have limitations as analytical tools, including: the inability to determine profitability; the exclusion of interest expense, interest income, and associated significant cash requirements; and the exclusion of depreciation and amortization, which represent unavoidable operating costs. Management compensates for these limitations by relying on our GAAP results. Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.

Forward-Looking Statements

This press release includes statements about our expectations of future operational and financial performance that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements regarding our outlook. Statements preceded or followed by, or that otherwise include, the words "believes," "expects," "anticipates," "intends," "project," "estimates," "plans," "forecast," "is likely to," and similar expressions or future or conditional verbs such as "will," "may," "would," "should," and "could" are generally forward-looking in nature and not historical facts. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. The accuracy of such statements is subject to a number of risks, uncertainties, and assumptions that could cause our actual results to differ materially from those projected, including, but not limited to, prices for building products, changes in the competitive position of our products, commodity input costs, the effect of general economic conditions, our ability to efficiently and effectively integrate the BROSCO acquisition, mortgage rates and availability, housing demand, housing vacancy rates, governmental regulations, unforeseen production disruptions, as well as natural disasters. These and other factors that could cause actual results to differ materially from such forward-looking statements are discussed in greater detail in our filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of this press release. We undertake no obligation to revise them in light of new information. Finally, we undertake no obligation to review or confirm analyst expectations or estimates that might be derived from this release.

Boise Cascade Company

Consolidated Statements of Operations

(in thousands, except per-share data) (unaudited)

	Three Months Ended									Six Months Ended
	June 30						March 31, 2024			June 30
	2024			2023			March 31, 2024			2024			2023

Sales	$	1,797,670		$	1,815,219		$	1,645,420		$	3,443,090		$	3,359,548

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)		1,440,680			1,426,436			1,307,439			2,748,119			2,657,071
Depreciation and amortization		34,367			30,722			35,850			70,217			61,908
Selling and distribution expenses		149,783			139,205			144,110			293,893			267,993
General and administrative expenses		25,943			30,147			25,117			51,060			56,610
Other (income) expense, net		(84	)		(1,266	)		(78	)		(162	)		(1,611	)
		1,650,689			1,625,244			1,512,438			3,163,127			3,041,971

Income from operations		146,981			189,975			132,982			279,963			317,577

Foreign currency exchange gain (loss)		(104	)		320			(299	)		(403	)		247
Pension expense (excluding service costs)		(37	)		(41	)		(37	)		(74	)		(82	)
Interest expense		(6,105	)		(6,339	)		(6,070	)		(12,175	)		(12,700	)
Interest income		10,543			11,519			10,597			21,140			21,204
Change in fair value of interest rate swaps		(487	)		333			(220	)		(707	)		(471	)
		3,810			5,792			3,971			7,781			8,198

Income before income taxes		150,791			195,767			136,953			287,744			325,775
Income tax provision		(38,499	)		(49,447	)		(32,829	)		(71,328	)		(82,722	)
Net income	$	112,292		$	146,320		$	104,124		$	216,416		$	243,053

Weighted average common shares outstanding:
Basic		39,412			39,675			39,608			39,510			39,634
Diluted		39,608			39,834			39,956			39,766			39,818

Net income per common share:
Basic	$	2.85		$	3.69		$	2.63		$	5.48		$	6.13
Diluted	$	2.84		$	3.67		$	2.61		$	5.44		$	6.10

Dividends declared per common share	$	0.20		$	3.15		$	0.20		$	0.40		$	3.30

Wood Products Segment

Statements of Operations

(in thousands, except percentages) (unaudited)

	Three Months Ended									Six Months Ended
	June 30						March 31, 2024			June 30
	2024			2023			March 31, 2024			2024			2023

Segment sales	$	489,823		$	530,273		$	468,928		$	958,751		$	967,701

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)		378,920			387,407			357,721			736,641			715,146
Depreciation and amortization		22,270			23,005			24,384			46,654			46,795
Selling and distribution expenses		11,114			11,437			10,551			21,665			23,115
General and administrative expenses		4,606			5,364			5,020			9,626			10,542
Other (income) expense, net		133			(975	)		14			147			(1,327	)
		417,043			426,238			397,690			814,733			794,271

Segment income	$	72,780		$	104,035		$	71,238		$	144,018		$	173,430

	(percentage of sales)

Segment sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)		77.4	%		73.1	%		76.3	%		76.8	%		73.9	%
Depreciation and amortization		4.5	%		4.3	%		5.2	%		4.9	%		4.8	%
Selling and distribution expenses		2.3	%		2.2	%		2.3	%		2.3	%		2.4	%
General and administrative expenses		0.9	%		1.0	%		1.1	%		1.0	%		1.1	%
Other (income) expense, net		—	%		(0.2	%)		—	%		—	%		(0.1	%)
		85.1	%		80.4	%		84.8	%		85.0	%		82.1	%

Segment income		14.9	%		19.6	%		15.2	%		15.0	%		17.9	%

Building Materials Distribution Segment

Statements of Operations

(in thousands, except percentages) (unaudited)

	Three Months Ended									Six Months Ended
	June 30						March 31, 2024			June 30
	2024			2023			March 31, 2024			2024			2023

Segment sales	$	1,655,221		$	1,636,538		$	1,505,021		$	3,160,242		$	3,015,780

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)		1,409,510			1,391,015			1,278,421			2,687,931			2,566,565
Depreciation and amortization		11,741			7,386			11,107			22,848			14,456
Selling and distribution expenses		138,716			127,786			133,614			272,330			244,896
General and administrative expenses		10,070			12,089			9,534			19,604			22,119
Other (income) expense, net		(216	)		(288	)		(118	)		(334	)		(491	)
		1,569,821			1,537,988			1,432,558			3,002,379			2,847,545

Segment income	$	85,400		$	98,550		$	72,463		$	157,863		$	168,235

	(percentage of sales)

Segment sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)		85.2	%		85.0	%		84.9	%		85.1	%		85.1	%
Depreciation and amortization		0.7	%		0.5	%		0.7	%		0.7	%		0.5	%
Selling and distribution expenses		8.4	%		7.8	%		8.9	%		8.6	%		8.1	%
General and administrative expenses		0.6	%		0.7	%		0.6	%		0.6	%		0.7	%
Other (income) expense, net		—	%		—	%		—	%		—	%		—	%
		94.8	%		94.0	%		95.2	%		95.0	%		94.4	%

Segment income		5.2	%		6.0	%		4.8	%		5.0	%		5.6	%

Segment Information

(in thousands) (unaudited)

	Three Months Ended									Six Months Ended
	June 30						March 31, 2024			June 30
	2024			2023			March 31, 2024			2024			2023
Segment sales
Wood Products	$	489,823		$	530,273		$	468,928		$	958,751		$	967,701
Building Materials Distribution		1,655,221			1,636,538			1,505,021			3,160,242			3,015,780
Intersegment eliminations		(347,374	)		(351,592	)		(328,529	)		(675,903	)		(623,933	)
Total net sales	$	1,797,670		$	1,815,219		$	1,645,420		$	3,443,090		$	3,359,548

Segment income
Wood Products	$	72,780		$	104,035		$	71,238		$	144,018		$	173,430
Building Materials Distribution		85,400			98,550			72,463			157,863			168,235
Total segment income		158,180			202,585			143,701			301,881			341,665
Unallocated corporate costs		(11,199	)		(12,610	)		(10,719	)		(21,918	)		(24,088	)
Income from operations	$	146,981		$	189,975		$	132,982		$	279,963		$	317,577

Segment EBITDA
Wood Products	$	95,050		$	127,040		$	95,622		$	190,672		$	220,225
Building Materials Distribution		97,141			105,936			83,570			180,711			182,691

See accompanying summary notes to consolidated financial statements and segment information.

Boise Cascade Company

Consolidated Balance Sheets

(in thousands) (unaudited)

	June 30, 2024		December 31, 2023

ASSETS

Current
Cash and cash equivalents	$	922,076	$	949,574
Receivables
Trade, less allowances of $4,520 and $3,278		459,772		352,780
Related parties		249		181
Other		17,120		20,740
Inventories		832,241		712,369
Prepaid expenses and other		36,348		21,170
Total current assets		2,267,806		2,056,814

Property and equipment, net		948,841		932,633
Operating lease right-of-use assets		59,812		62,868
Finance lease right-of-use assets		23,548		24,003
Timber deposits		7,675		7,208
Goodwill		170,254		170,254
Intangible assets, net		180,928		190,743
Deferred income taxes		4,655		4,854
Other assets		8,445		9,269
Total assets	$	3,671,964	$	3,458,646

Boise Cascade Company

Consolidated Balance Sheets (continued)

(in thousands, except per-share data) (unaudited)

	June 30, 2024			December 31, 2023

LIABILITIES AND STOCKHOLDERS' EQUITY

Current
Accounts payable
Trade	$	438,235		$	310,175
Related parties		2,146			1,501
Accrued liabilities
Compensation and benefits		96,414			149,561
Interest payable		9,956			9,958
Other		144,755			122,921
Total current liabilities		691,506			594,116

Debt
Long-term debt		445,723			445,280

Other
Compensation and benefits		39,648			40,189
Operating lease liabilities, net of current portion		53,170			56,425
Finance lease liabilities, net of current portion		27,891			28,084
Deferred income taxes		93,062			82,014
Other long-term liabilities		17,988			16,874
		231,759			223,586

Commitments and contingent liabilities

Stockholders' equity
Preferred stock, $0.01 par value per share; 50,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.01 par value per share; 300,000 shares authorized, 45,130 and 44,983 shares issued, respectively		451			450
Treasury stock, 6,121 and 5,443 shares at cost, respectively		(234,879	)		(145,335	)
Additional paid-in capital		557,478			560,697
Accumulated other comprehensive loss		(502	)		(517	)
Retained earnings		1,980,428			1,780,369
Total stockholders' equity		2,302,976			2,195,664
Total liabilities and stockholders' equity	$	3,671,964		$	3,458,646

Boise Cascade Company

Consolidated Statements of Cash Flows

(in thousands) (unaudited)

	Six Months Ended June 30
	2024			2023
Cash provided by (used for) operations
Net income	$	216,416		$	243,053
Items in net income not using (providing) cash
Depreciation and amortization, including deferred financing costs and other		71,832			63,293
Stock-based compensation		7,923			7,518
Pension expense		74			82
Deferred income taxes		11,088			2,749
Change in fair value of interest rate swaps		707			471
Other		115			(1,798	)
Decrease (increase) in working capital, net of acquisitions
Receivables		(102,096	)		(171,794	)
Inventories		(120,976	)		(5,482	)
Prepaid expenses and other		(7,870	)		(7,805	)
Accounts payable and accrued liabilities		99,354			124,910
Income taxes payable		(6,251	)		33,220
Other		(1,151	)		1,801
Net cash provided by operations		169,165			290,218

Cash provided by (used for) investment
Expenditures for property and equipment		(74,099	)		(68,287	)
Acquisitions of businesses and facilities		(3,387	)		—
Proceeds from sales of assets and other		819			1,918
Net cash used for investment		(76,667	)		(66,369	)

Cash provided by (used for) financing
Treasury stock purchased		(88,858	)		(1,539	)
Dividends paid on common stock		(19,069	)		(132,967	)
Tax withholding payments on stock-based awards		(11,117	)		(5,926	)
Other		(952	)		(904	)
Net cash used for financing		(119,996	)		(141,336	)

Net increase (decrease) in cash and cash equivalents		(27,498	)		82,513

Balance at beginning of the period		949,574			998,344

Balance at end of the period	$	922,076		$	1,080,857

Summary Notes to Consolidated Financial Statements and Segment Information

The Consolidated Statements of Operations, Segment Statements of Operations, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information presented herein do not include the notes accompanying the Company's Consolidated Financial Statements and should be read in conjunction with the Company's 2023 Form 10-K and the Company's other filings with the Securities and Exchange Commission. Net income for all periods presented involved estimates and accruals.

EBITDA represents income before interest (interest expense and interest income), income taxes, and depreciation and amortization. Additionally, we disclose Adjusted EBITDA, which further adjusts EBITDA to exclude the change in fair value of interest rate swaps. The following table reconciles net income to EBITDA and Adjusted EBITDA for the (i) three months ended June 30, 2024 and 2023, (ii) three months ended March 31, 2024, and (iii) six months ended June 30, 2024 and 2023:

	Three Months Ended									Six Months Ended
	June 30						March 31, 2024			June 30
	2024			2023			March 31, 2024			2024			2023
	(in thousands)
Net income	$	112,292		$	146,320		$	104,124		$	216,416		$	243,053
Interest expense		6,105			6,339			6,070			12,175			12,700
Interest income		(10,543	)		(11,519	)		(10,597	)		(21,140	)		(21,204	)
Income tax provision		38,499			49,447			32,829			71,328			82,722
Depreciation and amortization		34,367			30,722			35,850			70,217			61,908
EBITDA		180,720			221,309			168,276			348,996			379,179
Change in fair value of interest rate swaps		487			(333	)		220			707			471
Adjusted EBITDA	$	181,207		$	220,976		$	168,496		$	349,703		$	379,650

The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the (i) three months ended June 30, 2024 and 2023, (ii) three months ended March 31, 2024, and (iii) six months ended June 30, 2024 and 2023:

	Three Months Ended									Six Months Ended
	June 30						March 31, 2024			June 30
	2024			2023			March 31, 2024			2024			2023
	(in thousands)
Wood Products
Segment income	$	72,780		$	104,035		$	71,238		$	144,018		$	173,430
Depreciation and amortization		22,270			23,005			24,384			46,654			46,795
EBITDA	$	95,050		$	127,040		$	95,622		$	190,672		$	220,225

Building Materials Distribution
Segment income	$	85,400		$	98,550		$	72,463		$	157,863		$	168,235
Depreciation and amortization		11,741			7,386			11,107			22,848			14,456
EBITDA	$	97,141		$	105,936		$	83,570		$	180,711		$	182,691

Corporate
Unallocated corporate costs	$	(11,199	)	$	(12,610	)	$	(10,719	)	$	(21,918	)	$	(24,088	)
Foreign currency exchange gain (loss)		(104	)		320			(299	)		(403	)		247
Pension expense (excluding service costs)		(37	)		(41	)		(37	)		(74	)		(82	)
Change in fair value of interest rate swaps		(487	)		333			(220	)		(707	)		(471	)
Depreciation and amortization		356			331			359			715			657
EBITDA		(11,471	)		(11,667	)		(10,916	)		(22,387	)		(23,737	)
Change in fair value of interest rate swaps		487			(333	)		220			707			471
Corporate adjusted EBITDA	$	(10,984	)	$	(12,000	)	$	(10,696	)	$	(21,680	)	$	(23,266	)

Total Company adjusted EBITDA	$	181,207		$	220,976		$	168,496		$	349,703		$	379,650

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805203074/en/

Boise Cascade Company Reports Second Quarter 2024 Results