Good morning. My name is Lisa, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade Fourth Quarter and Full Year 2023 Earnings Conference Call. It is now my pleasure to introduce you to Kelly Hibbs, Senior Vice President, CFO and Treasurer of Boise Cascade. Mr. Hibbs, you may begin your conference.

Thank you, Lisa, and good morning, everyone. I would like to welcome you to Boise Cascade's fourth quarter 2023 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO; Jeff Strom, Head of our Building Materials Distribution Operations; and Mike Brown, Head of our Wood Products operations, who will be retiring May 1 after an outstanding 25 years of service to Boise Cascade. Turning to Slide 2. This call will contain forward-looking statements. Please review the warning statements in our press release, on the presentation slides and in our filings with the SEC regarding the risks associated with these forward-looking statements. Also, please note that the appendix 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, Kelly. Good morning, everyone. Thank you for joining us for our earnings call today. I'm on Slide number 3. A few highlights as I reflect on our 2023 results. We reported full year net income of $483.7 million or $12.12 per diluted share on sales of $6.8 billion. We further executed our growth strategy through organic and acquisition initiatives, and we also provided meaningful returns to our shareholders through share price gains and dividends. I want to thank our associates across the company who continue to execute our strategy that positions us to serve and support our vendor and customer partners. Let me now turn to fourth quarter results. Total U.S. housing starts increased a modest 4%. However, the rebound in single-family housing starts was evident, reflecting a 23% increase compared to the prior year quarter. Both of our businesses again delivered strong operating and financial results. Our consolidated fourth quarter sales of $1.6 billion were up 1% from the fourth quarter of 2022. Our net income was $97.5 million or $2.44 per share compared to net income of $117.4 million or $2.95 per share in the year ago quarter. Fourth quarter 2023 results included $6.2 million of pretax accelerated depreciation related to the curtailment of lumber production in Chapman, Alabama, and approximately $3 million of transaction expenses related to the BROSCO acquisition. I'm pleased with the status of our BROSCO integration efforts and the financial results thus far delivered by our new teammates. As we start 2024, our balance sheet remains very strong and remain committed to our balanced approach to capital allocation. We look forward to executing our reinvestment and growth projects included in our expanded capital plan. Kelly will now walk through our segment financial results and provide an update on our capital allocation in more detail, after which I'll provide an outlook before we take your questions.

Thank you, Nate. Wood Products sales in the fourth quarter, including sales to our distribution segment were $449.7 million compared to $425.6 million in the fourth quarter of 2022. Wood Products reported segment EBITDA of $92.7 million, down from EBITDA of $99.7 million reported in the year ago quarter. The decrease in segment EBITDA was due primarily to lower EWP and plywood sales prices and an increase in other manufacturing costs. These decreases were offset partially by higher EWP sales volumes and lower wood fiber costs. The previously mentioned $6.2 million of pretax accelerated depreciation from our Chapman lumber curtailment did not affect our EBITDA, but did negatively impact our earnings per share in the quarter by approximately $0.12 per share. BMD sales in the quarter were $1.5 billion, up 3% from fourth quarter 2022. BMD reported segment EBITDA of $80.6 million in the fourth quarter compared to segment EBITDA of $99.4 million in the prior year quarter. The decline in segment EBITDA was driven by increased selling and distribution expenses of $12.9 million compared to the same quarter in the prior year. In addition, general and administrative expenses increased by $5.7 million, approximately $3 million of which were BROSCO acquisition-related costs, which had a negative impact on our reported earnings per share of approximately $0.06 per share. We expect total company depreciation and amortization in 2024 to be approximately $140 million. This includes the incremental depreciation and amortization from the assets acquired in our recent BROSCO transaction. In addition, our anticipated effective tax rate remains at 25%. Turning to Slide 5. On a year-over-year basis, fourth quarter volumes for I-joists and LVL were up 79% and 29%, respectively, driven by the sharp improvement in single-family housing starts. Sequential pricing for both I-joists and LVL was up 3% due to better-than-expected market conditions and fourth quarter rebate adjustments that had a positive impact on net price realizations. Looking forward to the first quarter, good momentum in single-family starts is a nice setup for EWP sales volumes, where we expect high single-digit growth in LVL volumes and modestly higher I-joist volumes on a sequential basis. On pricing, we expect to experience mid-single-digit sequential declines. Turning to Slide 6. Our fourth quarter plywood sales volumes in Wood Products were 363 million feet compared to 393 million feet in the fourth quarter of 2022. Plywood volumes decreased during the current quarter as we shifted a higher proportion of our internally produced veneer into EWP production, given the change in demand for EWP. The average plywood net sales price in the fourth quarter was down 5% from the fourth quarter of 2022 and down 2% sequentially. Thus far in the first quarter of 2024, plywood price realizations were consistent with our fourth quarter average. Moving to Slides 7 and 8, BMD's fourth quarter sales were $1.5 billion, up 3% from the fourth quarter of 2022, driven by sales volume increases of 13%, offset partially by sales price decreases of 10%. Excluding the impact of the BROSCO acquisition, BMD sales were flat. By product line, commodity sales decreased 8%. General line product sales increased 13% and sales of EWP increased 10%. Gross margin dollars were flat when compared to the same quarter last year, as lower margin dollars on EWP were offset by higher margin dollars generated on general line products. In addition, BMD's overall gross margin percentage was 15.2%, down 60 basis points from the 15.8% reported in the fourth quarter of 2022. BMD's EBITDA margin, including the previously mentioned acquisition-related costs, was 5.6% for the quarter, down from the 6.9% reported in the year ago quarter and down 90 basis points sequentially. As we typically do, we have grown our inventory since year-end and are well positioned to support the upcoming spring building season. Broadly speaking, we view inventory in the channel as lean for most product lines, providing a good backdrop for 2-step distribution. BMD's sales pace thus far in the first quarter of 2024 is approximately 10% below fourth quarter daily sales averages with extreme weather across most of the country in January, delaying many shipments to job sites. We anticipate our daily sales pace will accelerate as we move through the quarter and expect our first quarter 2024 EBITDA margins to be around 5%. Moving to Slides 9 and 10. These slides show the generally stable pricing environment for lumber and panel pricing during the fourth quarter of 2023 compared with the downward trajectory from the prior year quarter. As we entered 2024, commodity and lumber pricing has remained stable. While future commodity pricing volatility is always a possibility, we will maintain our approach to having inventory on hand to support our customer base. I'm now on Slide 11. We had capital expenditures of $215 million in 2023, with $59 million of spending in Wood Products and $156 million of spending in BMD. In Wood Products, our capital spending included veneer-related projects at mills that support EWP production. In BMD, our capital spending included new door and millwork facilities in Kansas City and Denver, the build-out and start-up of a new distribution center in Marion, Ohio, and the purchase of distribution centers in West Palm Beach, Florida and Modesto, California. We are excited about our expanded capital expenditure plan in 2024. In Wood Products, our 2024 capital plan includes spending on previously announced projects to add I-joist production capabilities at our Thorsby, Alabama, EWP mill and convert the layup line to a parallel laminated veneer line in our Chapman, Alabama, plywood facility. At our Oakdale, Louisiana facility, multiple investment projects are planned over the next 2 years, which will include upgrade and redesign of the log utilization center, a new veneer drier and press and modification of an existing veneer driver. In BMD, our 2024 capital expenditure plan includes additional spending on the new West Palm Beach and Modesto locations. Progress on permits, site work, and design for our greenfield distribution centers in Texas and South Carolina has been slow, but we expect spending to gain notable momentum in 2024, as we work towards anticipated start-up of those locations in '25 and '26, respectively. As we've noted before, the availability of engineering and construction resources and the timing and availability of equipment purchases will influence our ability to execute upon our plan for $250 million to $270 million of capital expenditures in 2024. Speaking to shareholder returns in 2023, we paid $346 million or a combined $8.70 per share in regular and special dividends and also completed $6.4 million of share repurchases. We have approximately 1.9 million shares still available for repurchase under our share repurchase program. In addition, our Board of Directors recently approved a $0.20 per share quarterly dividend for shareholders of record as of February 23, payable March 15. In summary, our balance sheet remains very strong and our principal capital allocation focus is to invest in our existing asset base and organic growth projects while remaining committed to our fixed dividend through this business cycle. We will also evaluate M&A as it aligns with our strategy and opportunistically return additional capital to shareholders as deemed appropriate by our Board of Directors via special dividends and share repurchases. I will turn it back over to Nate to discuss our business outlook.

Thanks, Kelly. I'm now on Slide number 12. Recent industry forecasts for 2024 U.S. housing starts are generally consistent with actual housing starts of 1.42 million in 2023 as reported by the U.S. Census Bureau. Despite recent declines in mortgage rates and homebuilders responding with various mechanisms to attract buyers, home affordability remains a challenge for consumers. However, with a resilient economy and elevated mortgage rates, which limit existing home inventory for sale, new residential construction is expected to remain an important source of supply for homebuyers. With new residential construction, the recent reduction in rates and potential for future rate reductions has created optimism that single-family starts will reflect year-over-year growth. However, there's reservation that multifamily starts may pull back from recent record highs due to capital costs for developers combined with cooling rents and elevated supply. Regarding home improvement spending, the age of U.S. housing stock and elevated levels of homeowner equity have provided a favorable backdrop for repair and remodel spending. While improvement spending is expected to remain robust compared to history, recent industry forecasts project mid-single declines in 2024. As Kelly mentioned, we remain well positioned to invest in our existing asset base and organic growth opportunities in both businesses as reflected in our robust 2024 capital spending plans. Our longer-term view on housing fundamentals is favorable, supported by demographic trends and underbuilt housing stock. As such, we remain clearly focused on execution of our strategies and have great conviction around our investments to grow the company. Finally, I would like to take this opportunity to thank and congratulate three members of our leadership team on their upcoming retirements. As communicated in January, Tom Hoffmann will be retiring after 43 years of outstanding service and dedication to Boise Cascade. As we announced yesterday afternoon, Erin, our Senior Vice President of Human Resources, retired on May 3, after 30 years of service and numerous accomplishments across the company. We are excited that Angella Broesch will be stepping into the role of Vice President of Human Resources for the company. And finally, Mike Brown will be retiring from Boise Cascade after 25 years of dedicated service. Mike, grateful for your work and impact on Boise Cascade and those that we serve and support. Among a number of achievements delivered by Mike, he helped establish a safety culture and systems that we benefit from today across our organization. Further, his leadership was fundamental in building our conviction and passion on safety as an organization, both in terms of what's expected and in what is possible. We are safer and better organization as a result. Mike has set a very high bar for our Wood Products division. I have complete confidence Troy Little and the team will continue to build on that momentum and success. We move forward with great clarity on what has made the Wood Products division successful, and we'll maintain that same approach and consistency as we move forward. Mike, all the best to you as you move into your well-deserved retirement. At this time, we'd welcome any questions. Lisa, would you please open the phone lines?

The first question today that we have is coming from Kurt Yinger of D.A. Davidson.

Great. I was hoping we could just start on EWP capacity. Can you just level set us on how much capacity you're kind of adding between what you've already outlined with Coastal and some of the recent announcements? And second, I mean, outside of your own moves, we haven't really seen a whole lot of capacity added within the industry as a whole. How do you think that positions you from a competitive standpoint? Should we continue to see single-family starts momentum grow over the coming years?

Thank you for the question, Kurt. This is Kelly, and I'll let Mike join in as well. To begin, it's crucial to address capacity. When we discussed the Coastal acquisition, it was meant to relieve constraints we faced with veneer, allowing us to operate closer to our nameplate capacity. You can find our nameplate capacity listed in our 10-K filed yesterday. We previously mentioned capacity increases of 5% and 12% by 2023 and 2025, respectively. It's important to clarify that we're not discussing specific increases in nameplate capacity but rather our ability to operate much closer to it than we have in the past. Additionally, the capacity improvements we've mentioned, such as the I-joist line and other initiatives aimed at increasing production, will help us manage through cycles and meet the seasonal demand during peak building seasons in the summer. Mike, do you have anything to add?

I could highlight that our strategy has long focused on achieving a high level of veneer self-sufficiency, which fully prepares us for market demands. This gives us a strong advantage now and in the future, particularly as we maintain the highest veneer self-sufficiency in relation to EWP production. We experienced this capability during the pandemic when housing starts increased, allowing us to quickly meet that demand. Additionally, it's important to recognize the seasonal nature of housing starts, with a significant concentration during spring and summer.

And then second, sticking with EWP, we have seen some choppiness in the last couple of years in terms of volumes, but if you were to take a step back, how would you say share has shifted over the last couple of years between I-joist, solid-sawn and Open Web Trusses and how big of a factor is substitution risk going forward as you think about pricing decisions?

Yes. Okay. So I'll take a stab at that one, too, Kurt. So yes, I think you saw or we saw some sort of changes in the dynamic during the pandemic, where because of the, I'll say, the relatively constrained supply of I-joist mainly due to the lack of people, open web prices gained some favor. And I don't think that's changed in terms of the capacity of Open Web Trusses in the marketplace. However, when you think about where we put ourselves relative to the product line, specifically I-joist, it is a very, very favorable product line because of the ease of installation and the ability to transport it significantly longer distances. And when you think about what's been happening, I'll say, in recent times, we are starting to see our I-joist demand improve, not insignificantly compared to times gone by. So open web prices are not going to disappear, but we can make a lot more per unit time, particularly during the peak building season.

Kurt, it's Nate. Maybe just one other data point on as you look at the competitive backdrop in terms of point of floor trusses or dimensional lumber versus I-joists, the other theme that's certainly out there with our builders is they're looking to reduce cycle times on the job site. And so if you look at, okay, what are the products and tools and solutions that help kind of drive lower cycle time or improve cycle time performance, I-joists are very much part of that answer. So as you think about, again, what the expectations are and the needs are on the job site, I think we feel really good about I-joist being an important answer to reducing cycle times for the builder.

Got it. Thanks to that, Nate, and thanks, Mike. Got on the retirement, and good luck here in Q1, guys.

Our next question will be coming from Susan Maklari of Goldman Sachs.

My first question is, I want to kind of build on this discussion around your increasing capacity in EWP. When you think about the builders increasingly using I-joist in order to realize the labor and the efficiencies that they're getting with those products, does that mean that the absolute level of starts that the industry is operating at, is perhaps not as impactful? Or do you think about that differently when you're considering the capacity that you're adding or the level of capacity that you want to achieve eventually? So I guess how do you think about the trade-off between the actual volume of starts or the actual level of starts relative to the mix shift that's coming through on the ground and builder preferences?

To rephrase your question for clarity, you seem to be highlighting two main aspects. Firstly, there is the overall level of construction starts, and secondly, the market opportunity for LVL or I-joist within those starts. As we've mentioned previously, the impact really varies depending on the location of the construction. For instance, in regions like the Southeast where slab-on-grade construction is common, I-joists may not be a viable option, yet there is still significant potential for LVL. Conversely, in places like Denver, where crawl spaces are prevalent, there are many chances for using these systems. While I may not be addressing your question head-on, I can confirm that there are indeed two aspects to consider, and we are optimistic about our standing in the market. We are confident about the medium to long-term outlook for single-family housing, which reinforces our commitment to ensuring product availability for our projects.

So, this is Mike. I'd like to add one more point regarding your question. The projects we've recently announced aim to accomplish a couple of goals. As I mentioned in a previous response, it's crucial to have product availability, and running machinery at full capacity isn't ideal. In our strategy, we consider housing starts important because they benefit us. Kelly's observation is correct, especially in the South, where Texas may not utilize as many linear feet of I-joist due to construction types. However, if we maintain available capacity and operate efficiently, along with our geographical footprint from upcoming projects in Thorsby, we will deliver products to market as quickly or quicker than our competitors at very competitive prices. This positions us well, as we need to ensure product reaches construction sites swiftly during the building season. Even though it may not perfectly correlate with housing starts, there is still a strong connection between increasing demand for I-joists and rising housing starts.

So it's a service level component to it. And it sounds like from what you're saying then, even if the level of starts is on a relative basis, incrementally slightly lower, let's say, than where we currently are or where steady state is, you could still see that benefit on the volume side because you've got those higher service levels and you're able to get the units out during that busy season?

Yes. I think that's fair. And I think that's part of the relationship that Wood Products as a manufacturer and BMD as the distributor has. We have inventory at our manufacturing sites as well as our distribution sites, and we can get it there very quickly. We have a very high service level compared to, I'll say, the remainder of the industry.

I think maybe one other thing to think about, too, is yes, single-family is the big driver for EWP. But multifamily also is certainly an opportunity for us to further attack for EWP as well.

And then I do want to shift to BMD as well. So when you think about the investments that you're making on that side of the business with the doors and the distribution centers and those things, how do you think about the upside in terms of volume there over time? And I guess, any thoughts on your existing capacity today? And how much these investments will support? And how do you think about the growth there over time?

Yes, that's a good question, Su. Over many years, especially recently, we have made significant organic investments in BMD with the goal of enhancing the company's earnings and stability. In our upcoming IR deck, which will be released shortly after this call, we will highlight our sales per start over time, showing positive growth across all product lines. This focus on growth in the distribution business is intentional, and we are actively working to enrich our product mix to continue supporting that growth. It seems Nate has something to add as well.

Su, it's Nate. As you consider the context for BMD in the market, it's crucial for us to support all of our suppliers. Think about what they are focused on and the initiatives they have been developing and will continue to introduce with new products and services. BMD plays a vital role in executing our supplier strategy concerning these new offerings. The SKU intensity is likely increasing, which presents significant opportunities for us to assist both our supply partners and our customers. I believe this narrative has been established and will continue to expand as we move through 2024 and into the following year.

I just want to squeeze one more question in. I'm not trying to make this a one-on-one for me, but I just want to get one more in. Which is that the gross margin in the Wood Products came down in the fourth quarter, but pricing held across most of those products. And so any thoughts on what drove that decrease? Is it the volumes that were coming through? Did you take more maintenance or downtime in there? And then any thoughts on where that could go for the first quarter?

Yes. So in the fourth quarter, it is typical that we do take some downtime for projects around the holidays and whatnot. And so we did see that in the fourth quarter. As we go forward from here, I mean, we highlighted a couple of key things, which will be out of the spring building season play out in terms of what kind of volume growth do we expect to see in the first quarter and then there's continued competitive pressures around EWP pricing. So those are probably the key things I'd highlight.

Our next question will be coming from Ketan Mamtora of BMO.

Maybe to start with on the BMD side, commodity prices have normalized and EWP prices have also come in a fair bit in the last four or five quarters, yet the margins have held up quite well. So two part question here. One, can you talk a little bit about performance in the general line category and where sort of you are seeing ability to get sort of higher margins than what you've done historically? And the second part to it is kind of what you highlighted for Q1 target. Is that what you would consider now in sort of this business mix that you have to be more normalized margins in the distribution business?

Yes. Ketan, this is Kelly. I'll let Jeff address the question about the general line category and the mix, and then I'll follow up regarding the margin profile. Go ahead, Jeff.

On the general line, what I would say to you is every investment we made, and if you go back to the previous question about our growth, the intention of there has been to expand our general line products to get deeper and wider with everything along with the millwork items. And so what you're seeing with that expansion there, those are higher-margin profile items of the growth, and it's working very well for us exactly what we're trying to do.

Yes. So Ketan, regarding your question about normalized margins, it's a good question. I would suggest that we exclude the years 2020 through 2022 because there were several extraordinary events during that time. A better comparison would be to look at 2023 versus 2019. During that period, starts were only up about 10% in 2023 compared to 2019. However, we've seen significant growth in both our earnings and EBITDA margins across both of our businesses during that time. The reason for this is our focus and execution on our strategy to enhance earnings and ensure earnings stability. While I won't specify an exact EBITDA margin percentage for either business, we are confident in our strategy, focus, and our ability to see our earnings meaningfully improve compared to 2019.

Understood. That's helpful. I have a follow-up on that. Can you share more details about how some of the general line categories are performing? I'm not asking for insights on all product categories, but perhaps a few major ones in terms of the activity levels as we head into '24?

Yes. The general line is doing well and is holding up. This year, we've noticed a difference compared to last year, particularly regarding inventory destocking. While inventory levels are still lean, there is more willingness this year for customers to make winter purchases or accept price increases, which indicates a greater confidence in what is ahead.

Got it. That's helpful. And then just one last one from me. You talked about mid-single-digit price erosion in EWP in Q1. Would you say at this point that prices are stabilizing post that? Or is there kind of more incremental downward pressure as we move through 2024? Or is it too early to say at this point?

So Ketan, it's Mike. Thanks for the question. Well, I think maybe it's a bit too early in the year to have a definitive view of what's going to happen. I can tell you that there are still pricing pressures in specific geographies. And I think the time that we'll have a better idea is clearly once we get into the start of the building season. So historically, February has not been the best month of the year for EWP demand just as a generalized statement, excluding the last few years, which have been a bit crazy. But generally speaking, in times gone by, we start to see an uptick in demand starting in March and further out into April and May. If that comes to pass, as it historically has, then I would hope that some of the pricing pressure will be alleviated, but we really don't know yet halfway through February. It's a bit early to say exactly what's going to happen in the peak building season.

Our next question will be coming from Reuben Garner of Benchmark.

Congratulations, Mike, on your retirement. It's been wonderful to hear from you over the past few years, and I appreciate your support during that time. Kelly, this follows up on your comment comparing today to 2019. One significant change has been the pricing power you've demonstrated, particularly in the two EWP categories. Could you discuss what has changed today compared to four or five years ago that gives you confidence these levels will be maintained? This includes both the competitive landscape and any internal adjustments you've made to your pricing approach. I believe starts are up by 10%, and pricing has increased even more than that during this period. Any insight into your confidence and the internal changes that have contributed to this would be appreciated.

Yes, that's a good question, Reuben. My framework from 2019 to 2023 can be divided into a few areas. If you look at commodities, the current situation in 2023 resembles what we saw in 2019 based on the composite averages. The pricing in that sector is quite similar. We have seen growth in EWP pricing as well as in general line pricing. Currently, general line pricing is quite stable and holding strong. While we have indicated some pricing pressures in EWP, when you consider everything together, it really ties back to our strategy in BMD of improving our product mix, specifically by growing EWP and general line, while maintaining a focus on commodities. We have successfully achieved that and also continued to scale the business. We believe this positions us to capture market share over time. All these factors contribute to our confidence that we have established a higher standard.

Yes, Reuben, it's Nate. I believe Kelly has clearly detailed the BMD strategy and our plans. We're pleased with how it's being received in the marketplace daily, both by our customers and suppliers. Regarding Wood Products, I want to emphasize that the engineered wood products and the veneer supporting that, along with plywood, remain a key focus for us. In terms of earnings, performance, and stability, comparing our current position to five years ago, we have certainly strengthened our engineered wood products franchise in various aspects, including our capabilities and overall production volume. We've also eliminated some products that we no longer manufacture. This clarity and focus in Wood Products have been crucial. We're optimistic about the future, especially with our upcoming investments in Alabama and Louisiana over the next couple of years.

And since Su took all my questions, I'm going to jump to the capital allocation one. I'm just curious if there's been any change or if you anticipate any change in maybe the philosophy in returning cash to shareholders, whether it's be a ramping share repurchases versus the way you guys have paid out a dividend in the past? Or if you think you'll stick to a similar philosophy going forward for assuming that you don't have places to put it to work for organic growth or M&A?

Yes, sure. Thanks, Reuben. Good question. So the overarching capital allocation strategy is unchanged. We're going to focus on reinvestment and growth via organic or M&A opportunities and obviously, we have a big capital spend ahead of us here in '24 and '25. And so I guess in terms of then returned to shareholders, we'll look to continue to grow the regular dividend over time. But as I look forward here into 2024 a little bit, absent M&A, my expectation would be that we will be speaking to further shareholder returns as we work our way through 2024, and those could be in the form of special dividends or stock repurchases or frankly, a combination of the two. I don't want to get ahead of my board on that topic in terms of the puts and takes and how we think about it, but that's our expectation sitting here today.

We have a follow-up question coming from Kurt Yinger of D.A. Davison.

Great. Not to beat a dead horse on EWP, but Mike, I wanted to go back to your comment around pockets of pricing pressure kind of persisting in certain geographies. Is that primarily competitors buying to pick up some share and secure a bit more volume ahead of the building season, general pushback from builders or dealers, potentially some import competition? I mean what would you say are kind of the biggest underlying drivers of kind of this trickle down and slow discounting that we've seen, I guess, late into 2023 and maybe even here to start 2024?

Yes, Kurt. Part of the answer regarding imports is that they are not a significant issue; they appear and vanish. They can be a minor annoyance in certain regions at times, but that is usually sporadic. The main issue is manufacturing. In some areas, which I won’t specify, there are people who believe that lowering prices is the solution, and as a result, we respond accordingly. It’s not just one specific producer causing this; it’s a mix of factors. We have a unique go-to-market strategy where we offer a range of items in our packages. This includes products, services provided by BMD, software, and outsourced systems. We believe that, in the long run, the value we provide is distinct from others, which is why our pricing structure differs as well. However, in the meantime, we sometimes have to adjust our strategies to remain competitive, as we want to sell our products in those regions. We also have strong partnerships in those areas that we aim to support.

Kurt, it's Nate. I just wanted to add to Mike's comments. When we consider the pricing conversation for EWP at this time of year, it's not unusual when we look back through history. The absence of this conversation during the COVID period was likely a unique situation. This environment represents typical competitive discussions. As Mike mentioned, we will evaluate each case in its respective market. As we transition into the building season, our focus must remain on being competitive, which ultimately comes down to our ability to serve and support the marketplace. It's critical to provide excellent capability and experience for both lumber yards and homebuilders during this time. Ensuring our team focuses on this is essential for us. If we execute well, we believe we will continue to earn business from both our dealer and builder partners. It’s not unusual for us to find ourselves in this situation today. Moving forward, the key question will be who can effectively support my business, and as Mike pointed out, we feel confident in our position to do just that.

Thank you. This concludes today's Q&A session. I would now like to turn the call back over to Nate Jorgensen for closing remarks.

Great. Thanks, Lisa. Just we appreciate everyone joining us on the call this morning and for our update, and we thank you for your continued interest and support of Boise Cascade. With that, be well, be safe. Thank you.

Thank you all for joining today's conference call. This concludes today's conference. You all may disconnect.