Good morning. My name is Sydney, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade's Second Quarter 2020 Conference Call. All lines have been placed on mute to prevent any background noise. Before we begin, I remind you that this call may contain forward-looking statements about the company's future business prospects and anticipated financial performance. These statements are not guarantees of future performance, and the company undertakes no duty to update them. Although these statements reflect management's expectations today, they are subject to a number of business risks and uncertainties. Actual results may differ materially from those expressed or implied in this call. For a discussion of the factors that may cause actual results to differ from those anticipated, please refer to Boise Cascade's recent filings with the SEC. It is now my pleasure to introduce you to Wayne Rancourt, Executive Vice President, CFO, and Treasurer, Boise Cascade. Mr. Rancourt, you may begin.

Thank you, Sydney. Good morning, everyone. I would like to welcome you to Boise Cascade's second quarter 2020 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO; Mike Brown, Head of our Wood Products Operations; and Nick Stokes, Head of our Building Materials Distribution Operations. Turning to Slide 2, I would point out the information regarding our forward-looking statements. The appendix of the presentation includes reconciliations from our GAAP net income to EBITDA and adjusted EBITDA and segment income to segment EBITDA. I will now turn the call over to Nate.

Thanks, Wayne. Good morning, everyone. Thank you for joining us for our earnings call today. I’m on Slide number 3. Our first quarter sales of $1.2 billion were up 1% from the second quarter of 2019. Our net income was $33.6 million or $0.85 per share, compared to net income of $27.7 million or $0.71 per share in the year-ago quarter. Total U.S. housing starts decreased 17% compared to the same period last year. Single-family starts, the primary driver of our sales volumes, also decreased 13%. Despite the decline in new residential construction activity, the operating and financial performance of both businesses were strong in this unprecedented environment. Our Wood Products manufacturing business reported segment income of $17.1 million in the second quarter, compared to $18.9 million in the year-ago quarter. Wood Products' continued focus on manufacturing cost improvements was especially notable, given the production schedule modifications and temporary curtailment actions taken in the second quarter. Our building materials distribution business reported segment income of $43.2 million on sales of $1.1 billion for the second quarter compared to $33.8 million of segment income on sales of $1.1 billion in the comparative prior year quarter. BMD’s sales and income were robust, and our long-term strategy and commitment to consistently carry a broad base of in-stock products, supported by high service levels and a solid financial position, continues to deliver value to our vendor and customer partners in the supply chain, as well as our shareholders. Wayne will walk through the financial results in more detail and then I'll come back to provide an update on our ongoing response to the COVID-19 impact on our businesses and our outlook before we take your questions. Wayne?

Thank you, Nate. I'm on Slide 4. Wood product sales in the quarter, including sales to our distribution segment, were $282 million, compared to $334 million in the second quarter of 2019. As Nate mentioned, Wood Products reported segment income of $17.1 million in the second quarter, compared to $18.9 million in the prior year. Reported EBITDA for the business was $31 million, down from EBITDA of $33 million reported in the year-ago quarter. The decrease in EBITDA was due primarily to lower sales volumes and prices of EWP, as well as lower lumber sales prices. The decreases were offset partially by increases in sales prices for plywood and lower wood costs. BMD sales in the quarter were $1.1 billion, up 3% from the second quarter of 2019. Sales prices increased 4%, while sales volumes were down 1%. The business reported segment income of $43.2 million or EBITDA of $48.8 million in the second quarter. This compares to segment income of $33.8 million and EBITDA of $38.8 million in the prior year quarter. The increase in segment income was driven primarily by a gross margin increase of $16.3 million, resulting from improved gross margins on commodity products compared with the second quarter of 2019. This improvement was offset partially by a $5 million increase in selling and distribution expenses. The amounts for unallocated corporate costs and other items impacting our reported adjusted EBITDA can be found in the tables of our earnings release. The net of those items was negative $8 million in the second quarter of 2020, compared with $7.3 million in the second quarter of 2019. Turning to Slide 5, our second quarter sales volumes for I-joists and LVL were 18% and 16%, respectively, compared with the second quarter of 2019. We adjusted our EWP mill operating schedules early in the second quarter in response to the initial COVID pandemic impact on new residential construction in certain geographies. We have been increasing our production schedules as demand reaccelerated through the second quarter. We are seeing stronger WWP demand continue into the third quarter. Pricing in the second quarter for LVL and I-joists were both down 1% compared to the first quarter of 2020. Turning to Slide 6, our second quarter plywood sales volume in wood products was 314 million feet compared to 343 million feet in the second quarter of 2019. A lower volume for plywood sales reflects modifying production levels in response to expected weaker market conditions early in the second quarter. The $287 average plywood net sales price in the second quarter was up 6% from the second quarter of 2019. Plywood demand and pricing in the second quarter was stronger than we expected at the time of our last earnings call. Pricing in demand for plywood has remained strong early in the third quarter. We expect plywood prices to moderate as capacity restoration takes effect and mitigates the current supply-demand imbalances in the marketplace, while seasonal impacts on demand take place later this year. The pandemic circumstances are limiting the ability of the industry to quickly respond with additional production. Plywood pricing thus far in the third quarter is approximately 30% of our second quarter average. Moving to Slide 7, BMD’s second quarter sales were $1.1 billion, up 3% from the second quarter of 2019, with prices up 4% and volumes down 1%. By product area, BMD's commodities sales increased 9%, general line products sales increased 4%, and EWP sales decreased 10%. The gross margin percentage for BMD in the second quarter was 13%, up 100 basis points from the 12.4% reported in the second quarter of 2019. Gross margin increase resulted from improved gross margins on commodity products compared to the second quarter of 2019, as well as an increased proportion of the sales occurring out of warehouse rather than direct. BMD’s EBITDA margin was 4.3% for the quarter, up from the 3.5% reported in the year-ago quarter. As COVID-19 restrictions were loosened, construction activity resumed mid-second quarter and continued at a robust pace through the end of the quarter. Our BMD warehouse sales were particularly strong as our retail lumberyard customers relied on our broad base of inventory and high service levels to minimize their working capital investment, given COVID-19 related uncertainties and elevated commodity product prices. In addition, we have had strong demand from our home center customers in response to elevated repair and remodel and do-it-yourself activity as people are spending more time at home during the pandemic. The combination of reaccelerating construction activity and capacity curtailments of commodity products across the industry created supply and demand imbalances in the marketplace during the latter part of the second quarter. Commodity wood products pricing continued to move sharply higher in July. Commodity product pricing may be volatile as we move through the third quarter and head into the end of fall. Pricing movements from current levels will likely be determined by the strength of end-market consumption and industry operating rates. Current composite panel and lumber prices are more than 50% of those second quarter 2020 averages.

Thanks, Wayne. I'm on Slide number 12. Our first priority during the crisis continues to be the health and safety of our associates and those whom we do business with. It is important we support our community efforts and conduct our business appropriately based on the guidance from the CDC and others. Wood Products is in the process of attempting to restore production rates to pre-COVID-19 levels in response to strong end product demand. However, we continue to experience periodic short-term disruptions at many locations due to COVID-19. In addition, we expect activity levels across our distribution network to continue to vary as COVID-19 impacts geographies across the U.S. to differing degrees, and federal, state, or local restrictions are implemented. To date, we have not experienced significant supply chain disruptions that would limit our ability to meet customer delivery commitments, or source the raw materials and finished goods needed by our operations. We continue to conduct business with modifications to mill and distribution center housekeeping and cleanliness protocols, employee travel, employee work locations, and virtualization or cancellation of certain sales and marketing events, among other modifications. In addition, we continue to actively monitor evolving developments and may take actions that alter our business operations, as may be required by federal, state or local authorities, or that we determine are in the best interest of our associates, customers, suppliers, communities, and shareholders. I'm on Slide number 13. The Blue Chip consensus for U.S. housing starts was published – last published at an expectation of 1.19 million for 2020. Although we believe that current U.S. demographics support a higher level of housing starts, the impact of COVID-19 on residential construction is uncertain. Beyond economic uncertainties, the pandemic may improve the demand for single family residential construction as homeowners consider a transition to less densely populated geographies. Furthermore, with homeowners spending more time at home, repair remodel spending may continue to strengthen as homeowners invest in existing homes. We are seeing favorable cost improvements and efficiencies in our manufacturing operations. Wood Products will continue to manage production levels appropriately in this volatile COVID-19 environment. In our distribution arena, BMD has done a terrific job of executing and responding to market opportunities at both the local and national level. Effectively managing the impacts of commodity price changes will remain at the forefront for our distribution group in the second half of this year. With uncertainties in demand and difficulties in judging the appropriate operating rates, commodity wood products pricing could be volatile in the months ahead. We'll react appropriately. We will continue to be guided by our values of safety, integrity, respect, and pursuit of excellence. We will successfully get to the other side of this crisis by centering on the health and safety of our associates, and making sure we use our operating and financial strength for the benefit of our customers, suppliers, communities, and shareholders. Thank you for joining us today and for your continued support and interest. We would welcome any questions at this time. Sydney, would you please open the phone lines?

Our first question is from Brian Maguire with Goldman Sachs. Your line is open.

Hey, good morning, Nate. Good morning, Wayne.

Good morning, Brian.

Question on the current supply and demand dynamics, looking for reference several times, it's very tight in the market, just wonder if you could talk about where your own operating rates are on plywood and EWP? And, you know, related to that in the plywood market, may be if you could just talk about how far out your order books are going? I know, once you get past two or three weeks it indicates a pretty tight market, but I'm guessing we're probably beyond that, given how tough it is to find product these days. And, you know, can you just comment on how far out you've been able to lock in the current exceptionally good prices? Are we, you know, basically locking in the month of August and parts of September at this point, or you know, is there a lot of your volume that would still be at risk for lower prices in the third quarter?

Yeah, good day, Brian. It's Mike Brown. On the operating rates side, as I'm sure you've heard from many others, we're attempting to ramp up. I'd say as a general statement, we're sort of running 5.5 to 6 days a week where we can. We have some animated sort of downtime associated with either positive COVID cases or losing people through contact tracing. So, it varies week to week, but somewhere around that 5.5, maybe 6 days a week, depending on the location. We are trying to ramp up, but we're having great difficulty finding people to bring to work for a variety of reasons. So, I really don't see us getting to a much higher operating rate anytime soon. Certainly, our intention, but that might take us a few months. As we relate to our order file, yeah, our current order file and the plywood side of the business extends through August and in a couple of locations now into early September. So, we've been able to lock in the good prices that Wayne was talking about just a moment ago. What will happen after that, your guess is as good or better than mine, you know, we'll just have to see how long the good run lasts.

Great. I appreciate that. And I guess with the demand side, I think you guys talked about so much of it coming from repair and remodel these days. Obviously, there's a lot of people at home with a little bit more time and with the stimulus money, maybe a little bit more disposable income. You guys usually have a pretty cautious or at least balanced outlook on the market I find. So, to what extent do you worry that some of this is just pulling forward, some demand that, you know, would have otherwise been there, but maybe would have been spread out over the next 12 months? You know, just kind of the concern that we had an eventual downturn as some of the stimulus money runs out or as people need to eventually go back to work?

Hey Brian, it’s Nate. I’ll take a shot at that. I think the consistency that we've seen from the repair and remodel has been really strong since the start of COVID, and we really haven't seen anything that would signal a change to that. To your point, the financial position, including the stimulus money has been helpful, I think for people in terms of investing their spend rate on things like vacations and other activities has been reduced significantly. And obviously, they're spending more time at home. So, I think as we, you know, get a chance to see the trends, look at the repair and remodel confidence index, it would continue to suggest good momentum moving forward. Likely the question around sustained unemployment levels at high levels is usually not constructive for a lot of spending activity, either new residential or repair and remodel, but at this point, the kind of momentum and the cadence that we're seeing on repair and remodel week, we expect that to continue and again, it's been fairly consistent throughout the course of COVID.

Okay, just last one for me to switch over to the engineered wood products business. You know, it sounds like trends there probably not as good as the rest of the business with most of the volume being tied to new housing starts, but maybe you could just talk about what the utilization rate is on that part of the business, and I know there was some new industry capacity coming in just at that, are you seeing any impact from that on your partnership in the distribution channels or, you know, any impact on pricing that you might be seeing from that?

Yeah, Brian, it is Mike again. Last bit first. As relates to the new capacity, I think you're referring to the Roseburg facility in Chester, South Carolina. They're still in a ramp-up phase. We really at this stage have seen very, very modest, if any impact from the volume and/or pricing. There's been a couple of specific regional situations, but nothing of any great significance. I have no doubt sooner or later they'll get through the ramp-up stage and there'll be more volume come online, but thus far really hasn't been a major contributing factor. As it relates to operating rates, you know, EWP Mills, you know, we have very strong order files, and as a result of that, I think we will be running quite hard in the EWP side of the business for quite a while. We sort of lend some credence to the fact that for the previous number of months, mainly, at the dealer level, folks really took their inventories down a long way. So, I'm sure whether it's the dealers or the builders, they're building inventory in their channel, and I suspect that that's going to go on for quite a while and the results that I've read from the builders that have released numbers show some pretty strong numbers actually for the last number of months. And their prognosis is, I guess I would call it quietly optimistic for the remainder of the year.

And Brian, that's part of the tensioning the plywood market at the moment as you have a lot of veneer that’s getting diverted into the EWP manufacturing. So, there was a limited ability for plywood guys to come back on with a lot of incremental volume with the EWP demanding strong.

Yeah, I was going to ask that, but I didn't want to be too greedy with questions, but just, yeah, thinking about how much of your veneer you're trying to shift over to the plywood market to take advantage of the exceptionally good prices these days. Yeah, sort of makes sense that there's a natural tension between the two.

Yeah, and just I think, Brian, I mean, there's only so much veneer that I will say is appropriate to put into EWP and we're putting all that veneer we can possibly muster into EWP at the moment, even with these good plywood prices. Thank you.

Certainly. Our next question comes from the line of George Staphos with Bank of America. Your line is open.

Hi, everyone. Good morning. Thanks for all the details. I wanted to come back to the mix shift that you've seen in BMD from what had been direct to warehouse sales, which has helped margins. My guess is a lot of that is being driven by increasing confidence from builders, but not enough confidence to buy large orders direct, and so that's helping BMD, and if that's the correct assumption, if not, obviously, please go into what's been driving that. Do we have to worry about a mix shift to negative at some point, as in fact, we see more confidence in sustainability of this improvement in building activity?

Hi, George, this is Nick Stokes. I think your initial presumption is part of the answer, certainly as dealers anticipated declines in their demand in late March, early April. And the combination of the uncertainty associated with COVID driven by that. I think, therefore, many of them made the determination that they wanted to run a little bit late. Then when demand bounced back, their inventories were a little lean. Order files were extended primarily on the commodity products. And so, really, it's a combination of the two; a, a little bit of uncertainty in terms of what their demand is going to be; and b, a little bit of uncertainty and concern about buying six weeks out at relatively high prices. And so, the combination of those two things prompted behavior where they could buy it in a shorter timeframe in smaller quantities, kind of adjusted in time. As to your speculation about does that reverse course over for some period of time, I don't worry about that too much, really because certainly if demand becomes more predictable, and order files and prices become more predictable, we're kind of back to a status quo as opposed to a big swing to the negative.

Okay. Thanks for that, Nick. You know, and I realize it's hard to answer this because it's multiple parts, and you know, it's ultimately a high-class problem to have, but when you look at the incremental margins in BMD in the quarter, you know, I haven't recalled one that was this large in quite a while, if there's a way to parse the 20% incremental margin versus, you know, what would normally be say 4% to 5%, and how that arose, you know, whether it was inventory gains, you know, commodity pricing, however you felt most comfortable describing it, if at all, that would be helpful.

I'll give it a whirl here. Certainly, when the composite price indexes run up 100 or 200, or 250 bucks a thousand, and that's where we're at today, I realized we're a month into the third quarter, but you think about the embedded inventory costs that we have in the valuation and the marketplace. I would ascribe that the increase in our gross margins, primarily due to escalating – dramatically escalating commodity pricing, and as you know, that prompts volume, as well as, excuse me, volume as well as margin. Certainly, the second quarter is usually a very good quarter for us in terms of mix shift or seasonal products, and given what has already been described about repair and remodel products like decking jumps up pretty hard. And so it's a combination of all the above, and we don't spend a lot of time trying to articulate externally the unique attributes of each one of those at a very finite level.

Okay. Understood, but it sounds like it was what we'd expect. Most of it was driven by the benefit you got on pricing relative to your cost.

Yeah. And don't miss the volume piece as well.

Okay. Fair. My last two, and I'll turn it over real quick, Wayne, from the pension plan adjustments, once you're done with all the transacting that needs to occur on an ongoing basis, is there much of a change in the ongoing cash flow? And then to the extent that we're seeing more housing activity, hopefully, we ultimately get back up towards in terms of starts should we worry much at all about a mix shift to smaller homes as urbanites try to become suburbanites, and therefore a shift away from EWP to dimensional or you'll worry about that when you have to, because it'd be sure nice to get to 13, 14, 15? Thanks, guys.

So, let me take the pension one first, and then I'll talk about the housing. On the pension, we've had very modest cash going out from a GAAP standpoint, because as we pay lease payments on the two BMD properties, and as we fund our non-qualified pensions, those show up in a cash flow statement as pension contributions. And so the lease payments we're making on the BMD properties will go away, and we'll still have very modest number that will flow out on the non-qualified pensions, but we're also looking at legally binding provisions, but the cash obligations are probably about a million bucks a year. It's very small. On the housing question, I think there's been a trend really over the last 18 to 24 months or more. Median home sizes decline and part of that is, a lot of the big builders have been trying to hit entry-level homes. And to your point, we've probably lost about 200 square feet per start, or maybe a little more than that. And I would suspect within the COVID environment that there's a lot of larger builders that are building spec homes, and they will be a smaller footprint trying to pick up people that are trying to relocate out of a multi-family environment or a major metro area, and that's where we'll see a lot of the demand, but even with a smaller footprint those homes relative to a multi-family start are probably still close to a 3x. So, in terms of the material demands, while it may not be the same as a 2,800 or 3,000 square foot home, somebody's building something at 2,400 square feet versus building a multi-family that's still a net positive for us. So, that's certainly been the case in May, June, and July as we've seen them ramp up and housing starts again.

Thank you very much.

Thank you. Our next question comes from Mark Wilde with Bank of Montreal. Your line is open.

Good morning and congratulations on a great quarter. My first question is one for, I guess both Nick and Wayne, and that really revolves around sort of managing kind of commodity price risk, commodity volatility, you've done a great job over time, but we remember 2018. So, I wondered if you could give us some insights into specifically how you manage commodity price risk when we're seeing so much volatility. And if there are any signs that you watch for that would suggest to you we're nearing a top, are there any kind of yellow flags that you have learned to watch for over time?

Good morning, Mark. I'll take a whirl at it. As we've tried to articulate in the past, the commodity strategy that we have in all periods of time is underpinned by two primary assumptions. We want to be buyers and sellers every day. We've made commitments to our customers to have product available that's quicker than alternative sources, if you will. We believe that creates some value for the customer, as well as allows us to make a margin because of our ability to deliver promptly. We've also made commitments to our suppliers to be constant buyers. And underpinning that – those are the two underpins. As you navigate your way through the ups and the downs, we don't try to get too frisky about guessing ourselves here. And as you've seen over the years, when you get the kind of run we've had for the last quarter or so on sale margins and our net margins in terms of return on sales both escalate pretty dramatically, particularly given the dramatic nature of it. And when it contracts, we give it back a bit, but we believe this buying and selling, known order customers want every day keeps us from the wide swings. No, we always have cases where we buy stuff and sell it for a loss if it goes down pretty dramatically. To your question about what are the red flags and how do we feel about that right now? I would tell you that we've spent a lot of time focusing on what our customers expect to happen and what their behavior is sort of predicted to be. And we continue to do that, and at this point in time, customers increasingly tell us that they're pretty busy. They're pretty uncomfortable with these extended order files in the long time. So it gives us more confidence in making sure we have inventory. I would tell you that some of the tools that we've used in terms of the yellow flags in the past don't really apply today. I remember 2013 and I remember 2018. And we all said this thing could never go down, but we always knew that it would. And so, I think our strategy associated with the expectation that these kinds of levels are probably not in the long-term sustainable, we'll just manage it as best we can. And I wish I had some kind of a secret here that I could – secret handshake that I could tell you what it is, but I don't, it's kind of the basic stuff.

Okay. Nick, I'm just curious, is transportation and logistics an issue right now because I've heard things about, sort of the rails, particularly in Western Canada, taking a lot of car capacity out early in the second quarter, and then being kind of slow to bring it back. I've also heard kind of crazy situations where you've got Pacific Northwest lumber producers shipping stuff, by truck all the way to New England, which is just mind-boggling.

Yes, you're, what you're hearing is the same thing we're experiencing, Mark. And, you know, I'm not smart enough to figure out the root cause of that, but certainly the escalator volumes, and I think in a lot of cases, we're hearing from transportation providers that they're challenged with crews associated with reductions for COVID, but we've got a pretty good backlog right now of late cars, which is a combination of mills running a little bit late in terms of production, as well as transportation issues, and so to some degree, it makes the challenge associated with having a predictable supply chain very difficult. On the other hand, it really makes a case for kind of it's an opportunity for BMD because to the extent the rest of the world is challenged and we have product available for immediate shipment. It's a hell of an opportunity for us.

Yeah, okay. The last one I have in distribution, Nick was just to maybe talk about that decking business and I'm just curious about two things. One is, this composite decking, has that benefited from just the tightness in the treated wood markets over the last three or four months? And also, are you seeing anything in terms of increased competition, incremental capacity, coming in from some of the smaller players in composite decking?

I think it's a pretty good observation and I can tell you what our experience has been. I don't want to speak for our primary decking supplier. I'll leave that to them, but as is widely noted, there's been shortages of treated decking material. And I think the composite decking manufacturers think of conversions from wood as one segment of opportunity for their growth. And I'm sure they would tell you that that's occurred to some degree. Our experience within BMD is that our decking business is very, very strong, driven, a, by the conversion from wood a little bit, but just in terms of other people wanting to do the projects and some of the product mix that we've been selling wouldn't normally be a conversion from wood just given the price, and grain characteristics and those kinds of things. As to the question about additional composite decking manufacturers bringing on new capacity, I don't have any knowledge of that one way or the other, Mark.

Okay. Alright. Last one from me is, Wayne, can you just talk about kind of cost headwinds potentially in engineered wood in the third quarter, I'm just curious of kind of West Coast log prices perhaps moving up, and then also if you can just remind us the impact from higher OSB prices?

Yeah, I'll take a shot and I’ll let Mike add to it. As far as input costs, I think the most notable change is going to be on OSB. We have a trailing average contract, and obviously with prices moving up as sharply as they had, as we drop weeks off the back end, we'll replace them with weeks at a higher price. So, I would expect our OSB cost to go up fairly substantially. As an input to the I-joists, we use about one square foot of OSB for every lineal foot of I-joists. As far as lumber cost impacting EWP, we do have a solid production plan that we use in New Brunswick at our small I-joists facility. So, we'll see a little bit of cost input pressure to the extent lumber pricing impacts that facility, but again, it's relatively small part of our overall EWP production. And then in the northwest, as you noted, there's been some movement in log costs, and typically we see that sustained if lumber pricing is quite high. So, I would expect spot pricing for logs in the Northwest to move up. We really haven't seen much in the way of log cost escalation in the South and given standing inventories in the South, I wouldn't expect much escalation in log prices in the South, other than potentially cutting costs going up as demand recovers that there's issues around transportation, but it would be more transportation driven than anything else.

Okay, that's super helpful. Thank you and good luck in the third quarter and the rest of the year.

Thanks Mark.

Thank you. And our next question comes from Reuben Garner with The Benchmark Company. Your line is open.

Thank you. Good morning everybody.

Good morning, Reuben.

Most of my questions have been asked, but maybe, I think I just have one less, the – if we see housing starts growth return this quarter, is there any reason, or I guess could you discuss the reasons why your growth may be more or less whether it's your capacity availability in EWP or geographical differences between what the broader market might be seeing or, you know, smaller homes has been mentioned? Is there any reason why we wouldn't expect your volume growth in wood products to be kind of comparable to a starts ramp?

No, it should be comparable because with our national footprint through BMD in particular and our other wholesalers that we sell through, the manufacturing operations are distributed nationally and can respond basically wherever there's geographic strength. So, I think – particular on the product side, it will mirror what happens on a national basis.

Okay, and then actually, I do have one other one; I'm going to sneak in. EWP pricing, I know there were some expectation that you might see pressure there at least earlier in the year, has anything that's gone on, the expected ramp in growth, maybe a shift in warehouses being built, the inflationary environment in any of your input costs, is there any reason why maybe you could potentially actually push price in EWP or maybe just talk about what the price cost environment looks like for you guys? I know you just kind of laid out some high-level thoughts, but what does that – how does that stand from a price cost standpoint for you and EWP? And thank you guys, and congrats on the quarter.

Yeah, I'll let Mike add onto this, but as a general rule, we do not price our EWP based on cost inputs, it's based on supply and demand. And right now, the demand is quite strong. And a lot of the lead times are stretched out for EWP for ourselves and others, we’ re trying to keep all of our service programs in place, and so far, we've been pretty successful in doing that, but that's – the tension on the supply and demand is what would drive the pricing on the EWP and to your point if prices stay flat on EWP, we will see some margin compression with OSB costs and lumber input costs going up. I think we'll know more as we get into August and September in terms of how sustainable the demand is moving into the fall, and that strength would be – would drive the price increase, not input costs.

Thank you. And I’m not showing any further questions at this time. I'd now like to turn the call back to your speakers for any further remarks.

Great. Thanks, everyone. We appreciate everyone joining us this morning for our update and thank you for your continued interest in supporting Boise Cascade. Please be safe and please be well. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.