Good morning. My name is Rivka, and I will be your conference facilitator today. I would like to welcome everyone to Boise Cascade's First Quarter 2025 Earnings Conference Call. It is now my pleasure to introduce you to Chris Forrey, Vice President, Finance and Investor Relations at Boise Cascade. Mr. Forrey, you may begin your conference.

Thank you, Rivka, and good morning, everyone. I'd like to welcome you to Boise Cascade's First Quarter 2025 Earnings Call and Business Update. Joining me on today's call are Nate Jorgensen, our CEO; Jeff Strom, our COO; Kelly Hibbs, our CFO; Troy Little, Head of our Wood Products Operations; and Jo Barney, Head of our Building Materials Distribution Operations. 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, Chris. Good morning, everyone. Thank you for joining us for our earnings call today. I'm on Slide #3. Total U.S. housing starts and single-family housing starts decreased 2% and 6%, respectively, compared to the prior year quarter. Our consolidated first quarter sales of $1.5 billion were down 7% from the first quarter of 2024. Our net income was $40.3 million or $1.06 per share compared to net income of $104.1 million or $2.61 per share in the year-ago quarter. Our team delivered solid results during the quarter when considering an environment influenced by constrained demand, uncertain trade policies, and difficult weather. Homebuyer affordability challenges continue to affect demand and were compounded by increasing economic uncertainty that has led us to lower consumer and builder confidence. Despite the backdrop, our associates across the company remain clearly focused on delivering value to our customers and better partners, for which I'm incredibly grateful. In addition, the planned outage at our Oakdale, Louisiana plywood and veneer facility negatively impacted our first quarter results. The significant modernization projects underway there are on schedule to be completed at the end of the second quarter and will contribute to the ongoing strength of our EWP franchise. Lastly, our clear focus on strategic investments and returns of capital to our shareholders is bolstered by the strength of our balance sheet and our constructive view on long-term demand drivers for residential construction. Kelly will now walk through our financial segment results and provide an update on our capital allocation priorities, after which I'll provide an outlook before we take your questions. Kelly?

Thank you, Nate, and good morning, everyone. Wood Products sales in the first quarter, including sales to our distribution segment were $415.8 million, down 11% compared to the first quarter of 2024. The Wood Products segment EBITDA was $40.2 million compared to EBITDA of $95.6 million reported in the year-ago quarter. The decrease in segment EBITDA was due primarily to lower EWP and plywood sales prices and lower EWP volumes. In addition, the scheduled Oakdale outage negatively impacted year-over-year and sequential EBITDA comparisons by approximately $8 million and $7 million, respectively. In BMD, our sales in the quarter were $1.4 billion, down 7% from the first quarter of 2024. BMD reported segment EBITDA of $62.8 million in the first quarter compared to segment EBITDA of $83.6 million in the prior year quarter. BMD's gross margin dollars decreased $20.4 million from the first quarter of 2024, and our gross margin was 14.7%, a 40 basis point decline year-over-year. Turning to Slide 5. On a year-over-year basis, first quarter volumes for both LVL and I-joists were down 3%, better than the 6% year-over-year decline in single-family housing starts. The pullback in starts stems from a consistent theme we hear from the builder community around moderating the pace of new starts as they continue to sell through higher-than-anticipated inventory levels. As it relates to pricing, sequential results for both LVL and I-joists were down 3% due to continued pricing pressure created by the constrained demand environment and competition per share. Turning to Slide 6. Our first quarter plywood sales volume was 363 million feet compared to 372 million feet in the first quarter of 2024, primarily driven by the planned outage at our Oakdale mill. The 341 per 1,000 average plywood net sales price in the first quarter was down 10% on a year-over-year basis and down 3% sequentially. Moving to Slide 7 and 8. BMD's year-over-year first quarter sales decline of 7% was driven by a 5% decrease in volume and a 2% decrease in price. By product line, commodity sales decreased 7%. General line product sales decreased 3%, and sales of EWP decreased 13%. Weather meaningfully influenced our sales activity in the first quarter, with our January and February daily pace below $21.5 million before March rebounded to exceed $24 million per day. As I mentioned earlier, BMD's first quarter gross margin percentage was 14.7%, down 40 basis points year-over-year. In particular, gross margin dollars were affected by lower sales volumes and decreased margins on commodity and EWP products. BMD's EBITDA margin was 4.5% for the quarter, down from the 5.6% reported in the year-ago quarter, a reflection of lower gross margin dollar opportunity from slower sales activity and the associated deleveraging of our cost base. However, it is important to again reference the improved sales velocity in March, which resulted in EBITDA margins for that month similar to levels seen in recent quarters. Our BMD team continues to consistently provide high service levels across a broad mix of best-in-class products, and as we have spoken to in the past, periods like now where there is near-term demand or price uncertainty allow us to demonstrate the value proposition of two-step distribution. I'm now on Slide 9. As we look forward to the second quarter, EWP volumes will depend upon new home sales and the pace at which builders begin new starts. Our EWP order files improved seasonally as we entered the second quarter, and we expect EWP volumes to increase by mid- to high single digits sequentially. On EWP pricing, we expect to experience low single-digit sequential declines as competition per share persists. In plywood, we expect seasonal strengthening and a partial restart at Oakdale to result in mid-single-digit sequential volume increases. On plywood pricing, quarter-to-date realizations are consistent with our first-quarter average. The partial operating status at Oakdale is expected to negatively impact our financial results by roughly $5 million in the second quarter independent of market conditions. With regard to BMD sales, April's daily sales pace accelerated from the strengthening we saw in March and was approximately 13% higher than the first quarter 2025 sales pace of $22.3 million per day. Our daily sales pace for the balance of the quarter will depend upon end market demand and product pricing. Lastly, we expect approximately $38 million in total company depreciation and amortization, a 26% effective tax rate, and we have 37.6 million common shares outstanding as of April 30. I'm now on Slide 10. We had capital expenditures of $53 million in the first quarter, with $31 million of spending in Wood Products and $22 million of spending in BMD. Our capital spending range for 2025 remains between $220 million and $240 million. This range includes additional spending on our multi-year investments in support of our EWP production capabilities in the Southeast that we have spoken to previously. At Oakdale, impacted machine centers are restarting in phases, and we are excited to have that facility fully operational again by the end of the second quarter. The Thorsby I-line is expected to be operational in the first half of 2026. In BMD, we have made great progress on our greenfield distribution in Hondo, Texas, where construction is roughly 80% complete, and we look forward to its initial start-up by the end of the third quarter. Speaking to shareholder returns, we paid $10 million in regular dividends during the quarter. Our Board of Directors also recently approved a $0.21 per share quarterly dividend on our common stock. Shareholders of record as of June 2 will receive payment of this dividend on June 18. Through the first four months of 2025, we repurchased $71 million of our common stock, $54 million in the first quarter and another $17 million in April. Today, we have about 1.1 million shares available for repurchase under our current share repurchase program. Not unexpectedly, our cash position declined in the first quarter due to seasonal increases in working capital and the previously referenced capital investments and shareholder returns. Our balance sheet remains strong, and we continue to be dedicated to a balanced deployment of capital by investing in our existing asset base, pursuing organic growth opportunities, and returning capital to our shareholders. We also maintain the flexibility to execute M&A if opportunities emerge that align with our growth strategy. I will now turn it back over to Nate to share our business outlook and closing remarks.

Thanks, Kelly. I'm on Slide #11. Given the current environment, 2025 end market demand expectations remain difficult to predict, with most forecasts for housing ranging between flat to mid-single-digit declines. Our first quarter results were impacted meaningfully by seasonal factors and our purposeful strategic investments are in no way a good indicator of how end market demand and our financial results will play out for the balance of 2025. But expectations for the remainder of the year are unclear as significant macroeconomic uncertainties and elevated mortgage rates have dampened consumer and homebuilder confidence. However, where we do have great clarity is in the strength of our team and our ability to execute at a high level across all market conditions. We remain both steady and agile. We'll be prepared to respond as economic situations change and remain resolute in our service to our customer and supplier partners. The long-term demand drivers for our business remain strong, characterized by undersupply in housing units, aging U.S. housing stock, and elevated levels of homeowner equity. The structural demand built into the housing market and our robust balance sheet provide us the ability to stay focused on the execution of our strategy and creation of long-term value for our stakeholders. Thank you for joining us today and for your continued support and interest in Boise Cascade. We welcome any questions at this time. Rivka, would you please open the phone lines.

Our first question comes from Susan Maklari of Goldman Sachs.

I wanted to start on the general line side of the business. I guess, given the shifts in the macro that we've seen through the quarter, any thoughts on what you're hearing from some of your key suppliers there, positions of those inventories? And you also mentioned the benefit of a two-step distribution model in this environment. I guess what are you also hearing from customers? And how are they leveraging that service to help with their own inventories in the channel?

Sue, it's Nate. I'll start the conversation, and then Jo and Jeff and others can jump in as needed. I think overall, what we're seeing is that customers specific to the general line category are really dependent on two-step distribution in terms of the out-of-warehouse support on units, job packs, pieces, maybe as compared to full heavy-line direct shipments. So that out-of-warehouse support continues to remain a theme, and we're seeing that in terms of both expectations from our suppliers in general line as well as our customers in terms of how they're thinking about their working capital positions. I think the other thing that we're experiencing with our general line, which is really good, is their introduction of new products, new SKUs. And so that kind of creates a different narrative in the marketplace where customers may be hesitant to bring some of those new items in because they just don't know maybe the strength or the cadence of some of those new products. And so their dependency on two-step distribution, BMD remains very high. So I think overall, we’re looked to as probably even more important today, just in providing those just-in-time services as our customers are managing their working capital. And again, they're working that kind of risk and reward on having inventory levels, both on demand and also on price realization. So overall, it feels consistent. And again, two-step distribution is really an important part of that equation.

That's very helpful, Nate. And then you mentioned that the Oakdale project is progressing. It sounds like that's gone well. Any thoughts as you start to bring that back online relative to the macro environment that we're in? And how you're positioned in terms of ramping that up?

Susan, this is Troy. Yes, I mean, when that comes back online, the majority of that veneer goes into our EWP side. So we've been buying veneer on the open market right now to supplement that. So when they come back online, that veneer will shift back into the EWP. There'll be some, let's say, limited plywood volume that will come along with that, but we'll just offset what we're buying on the open market and continue and then adjust production as necessary depending on demand.

That's helpful. And then I'm going to squeeze one last question in, which is, it was nice to see the comments on the capital allocation and potential for the buyback. Can you talk a bit more about how you're thinking about those priorities for this year, just given the world that we're in? And anything of note on the M&A pipeline?

Yes, Sue, this is Kelly. I’ll address your question in reverse order. There's nothing significant to report on the M&A pipeline. While we still see some inbound interest, it has been a bit quieter lately due to near-term uncertainties. However, we remain interested in pursuing growth through M&A when the right opportunity arises. Regarding capital allocation, our strategy and focus have not changed. We are excited about the organic project work ahead of us and plan to be opportunistically mindful in the market concerning share repurchases.

Our next question comes from the line of Kurt Yinger of D.A. Davidson.

Just wanted to start off on EWP pricing. Kelly, not to pin you down all that much. But I guess directionally, would you expect kind of Q2 versus Q1 sequential pressures to be kind of about the same or maybe even lessening a little bit? And then hoping you could also just talk a little bit more about the competitive dynamics. And as you've moved into March and April and are seeing some seasonal strengthening, whether any of those pressures may be alleviating a little bit? Or if there's kind of a light at the end of the tunnel that you guys are seeing at this stage?

Yes. Sure, Kurt. I'll start and then maybe Nate and Troy and others can fill in. So in terms of the sequential guide, yes, we did say a low single digit again. I think we were off at roughly 3% sequentially here in the first quarter. We still have May and June to come, and it's still a very competitive environment out there. But I guess I would guide to a similar percentage to what we experienced in the first quarter in terms of sequential. But again, we'll see how May and June turn out. In terms of the underlying activity, like I alluded to in my comments, the order file on EWP has strengthened nicely here in April. But at the end of the day, we're still around a seasonally adjusted annual rate on single-family housing starts that's probably less than $1 million, right? And so we're still in an environment where there's still competition for share. And until we see more strength in the underlying demand, I think we'll need to see that before we see some levelization on pricing.

Kurt, it's Nate. Maybe just to add to that. I think generally, Q2 and the kind of the seasonal change represents where maybe there's overall less focus on pricing on the range of products and services, and people really get centered on execution and serving the marketplace. So we'll see how that narrative plays out through the quarter. But generally, and history would tell us second quarter generally is, again, more execution-focused and less on kind of setting up programs and some of the details around that. I think the other narrative for us is on when it comes to homebuilder focus, they continue to stay focused on their input costs but also cycle times. And as you think about EWP and its ability to compete and win relative to other options that are out there, whether it's dimensional lumber or even plated floor trusses, EWP is certainly an answer in terms of affordability and relative to open web trusses and also creates that kind of speed and simplicity on the job site, which again remains important for the builder. So those would be two backdrops as we transition into the building season, and we'll obviously be watching both of those carefully.

That's helpful. And then Kelly, just on the Oakdale impact, the $5 million, I assume that's on a year-over-year basis? And I guess with Troy's comments earlier around kind of buying open market veneer to supply EWP, is that kind of cost differential contemplated in some of the numbers you've talked about related to this outage? Or would that be separate?

Yes. Good question, Kurt. So the first part, the $5 million is sequential; the expected impact is sequential in terms of the impact of Oakdale. And so we expect to continue to see some challenges there as we start up. But then in terms of the veneer, I spoke to, I think, $8 million and $7 million impacts on EBITDA from Oakdale. In the fourth and first quarter, we were buying some amount of veneer. So there's not a lot of incremental cost of veneer impact into the second quarter. That was more of a year-over-year impact.

And then lastly, just on BMD. It sounds like general line is pretty stable. In terms of gross margin percentage, I guess, how much pressure are you seeing there in EWP? And if we look at kind of the last two years outside of quarter-to-quarter noise, you guys have been kind of 15% plus on gross margin. Is that still attainable for 2025? Or given some of these dynamics, is that maybe a little bit optimistic?

Yes. No, I think 15% is still certainly attainable, and we are a little bit below that this quarter. We didn't have a lot of opportunity on the commodity side, and there were some competitive pressures. But I think definitely 15% is attainable given the mix shift we've seen, especially as we head here into the second and third quarters where you start to see a bit of a richer product mix typically. So short answer is yes on the 15%, Kurt.

Our next question comes from the line of George Staphos of Bank of America Securities.

I have a couple of quick follow-ups to the previous questions. Could you discuss the competitive pressures in EWP? Are these pressures primarily coming from existing engineered players, or are they arising more from dimensions or companies producing open web trusses? Additionally, it appears that everything is going well, but regarding the 13% improvement in daily sales so far in the second quarter, is there any change or trend we should be aware of concerning product mix or sales velocity? It seems like everything is fine, but I just wanted to confirm that.

So maybe on the EWP let me start, George, it's Nate. Just on the EWP side of things, I think what we're seeing is the narrative on 2x10s and open web trusses is largely consistent and steady and not a lot there. So where we generally see the competitive challenges is with EWP producers. And so that's something that we are committed to making sure we're competitive in the market each and every day for our customers, both our direct customers as well as through the channel. And so that's been the backdrop in terms of the competitive nature, and that's been in place here for several quarters. So that would be probably our current view on EWP and what we're seeing and what we're expecting there relative to the competitive nature.

Yes. The second part of your question, George, pertains to the 13% sequential increase we've observed in the daily sales pace in BMD, which translates to about $25 million a day through April compared to the $22.3 million in the first quarter. I wouldn't say there is any significant mix shift; it's mainly due to the spring building season, improved weather, and a strong start in April. If you calculate it, $25 million per day times 64 days results in approximately $1.6 billion in revenue for the second quarter, which is expected to be an increase of $200 million sequentially. This gives you a clear idea of the gross margin dollar opportunity and the better leverage we anticipate on our cost base, leading to an improved figure for the second quarter in BMD.

Yes, Kelly, I appreciate that. What I was trying to express, and perhaps I could have framed the question better, is that it seems like the momentum has actually continued or even picked up. We're not at 13%, but there has been a slight decline recently. I'm just looking to confirm that or get your thoughts on it. Additionally, could you provide a brief update on the doors strategy and its effectiveness? Are there any supply chain issues related to BMD that we should be aware of regarding tariffs? Are you facing any challenges in obtaining the necessary products, or is everything in good shape?

Yes. So yes, just a quick follow-up. Yes. So that pace I referenced has continued through the first few days in April, and so we feel good about that. And then in terms of the doors and supply chain, I'll let Jeff lead the conversation there.

This is Jeff. On the door side, that strategy is going well. And I'll tell you, the acquisitions we made, the newer shops are growing, and you can see it. And when you greenfield one as we have, it's a process and it takes time, and they certainly are. And then you have the acquisitions, and they're obviously faster. But you can see them growing, and the legacy ones we have have picked up significantly. So it's working just the way we want it.

Okay. And on tariffs and supply chain?

Yes, George, it's Nate. I would say that tariffs have a limited impact overall for both Wood Products and BMD. Most of our production is U.S.-based, so we don't see this as a significant issue for Wood Products in the current environment. Our approach to distribution is to pass along pricing changes or cost increases, and tariffs fit into that general strategy. Regarding specific products, many of our metal items are imported, and options for sourcing those materials can be limited. The good news is we have experience dealing with supply chain challenges, especially during COVID, which has helped us build resilience and redundancy. Overall, the impact from tariffs is very modest at this time, with the focus mainly on the metal products.

Our next question comes from the line of Jeff Stevenson of Loop Capital.

This is actually Zack Pacheco on for Jeff this morning. Maybe to start, given the current pricing environment, can you just provide some more color specifically on how you're looking at LVL kind of through the remainder of the year more on the volume side? I believe last quarter share gains were called out as a positive. So just curious if there's any update from a share gain perspective.

Yes. As Kelly mentioned, Q1, we were down 3%, not quite as much as the housing starts. And also, he referenced the fact that so far starting into Q2, we're starting to see LVL in particular actually start outpacing our production. So we're starting to see our inventories come down there. And then as indicated, we're still looking for that seasonal bump in volumes that we've indicated in the chart. I don't know if you've got any more on that?

Yes. No, I think they Troy covered it pretty well other than, I guess, where I would add is that I think we've pretty consistently shown that our share of production as well as our volumes relative to single-family starts look very strong. And again, we think that's very much a function of one, having best-in-class products and best-in-class distribution tied together, and we continue to believe that's the right approach.

Understood. And then maybe just quickly on BMD. How attainable or how confident is the team on a sequential improvement in terms of EBITDA margins to at or above 5% in the next quarter, given the adverse weather you experienced in this quarter? Or do you think softer residential demand fundamentals will continue to weigh on segment margins?

Yes, I feel positive about our performance. In March, we returned to a more typical sales pace, and our EBITDA margins are back to the mid-5 range that you've seen in recent quarters. Based on our start in April and the pace we've observed, we are optimistic about achieving mid-5s for the second quarter. Additionally, I have a few other comments from Jo.

Yes. So as far as competitive positioning in the market, I think we're set up really well. Our national footprint allows us to shift our volume into pockets of strength across the country. It also helps us to service the national dealers who want and need consistent service across the country. We're aligned with many of the big builders and the dealers, and their strength in times of market weakness, but at the same time, our decentralized model allows us to support and serve the local and regional dealers and builders as well and be flexible to their needs. We've got great partnerships with our customers, with our suppliers, and really our integrated model of manufacturing is a key part of driving our success.

Our next question comes from Ketan Mamtora of BMO Capital Markets.

To begin with Q2 EWP volumes, if my calculations are correct, it appears that I-joist volumes would decrease by about double digits compared to last year. Kelly, could you elaborate on the factors contributing to this significant year-over-year decline in volumes?

Yes. I think it's really just a function of housing starts last year versus the housing start assumption for this year, Ketan. It's really that. It's not in my view, a loss of market share or the change in usage in terms of floor products; it's not that. It's really just a function of the underlying market conditions today.

Got it. And then if I look at your inventories at the end of Q1 versus kind of your total inventories at the end of Q1 of last year, it's again up like, I don't know, 12%, 13%, something in that range. Can you sort of talk to how you feel about the overall level of inventories, given the housing backdrop, which has been choppier? We've talked about things off to a slower-than-expected start.

It's Jeff. We feel confident about our inventory position. When the winter buying opportunities arose, we took full advantage of them. Given the current market, which is very distribution-oriented, both our suppliers and customers depend on us to be timely and well-stocked. We have ensured that we are prepared for this demand. On the dealer side, what we observe is that overall inventory is tight. There may be a few areas with excess because of tariffs, but generally, it remains lean and people are relying on distribution, and we're ready to meet that need.

Understood. That's helpful color. And then maybe last one for Nate. There's been a couple of transactions here recently, one kind of one of your supplier side and then one on the pro dealer side, some pretty meaningful transaction. How do you sort of think about potential impact, if any, over the next several years here?

Yes, that's a good question, Ketan. Regarding the consolidation that has occurred both upstream and downstream from Boise Cascade, this has been a trend for several years and is ongoing. There are important examples in front of us today. We believe we are well positioned in the marketplace and with our relationships. Our internal and external focus is to stay concentrated on the present and execute effectively for the benefit of our suppliers and the expectations of our customers moving forward. We play a crucial role for our suppliers and must continue to earn their trust every day. While consolidation and these trends have been happening, we expect them to continue, and it's essential for us to maintain a strong focus on high-level execution daily.

Our next question comes from the line of Reuben Garner of Benchmark.

Apologies if I repeat anything. I missed the first part of the call. A big picture question for you. And correct me if I'm looking at this wrong, but I think the volume for I-joist and LVL is kind of round-tripped back to pre-2020 levels for you guys, but on a higher level of starts. Is the difference between what you would have seen back then and today size and type of homes? Or is there some other dynamic? Are you guys thinking about your volume versus your price differently than maybe you did 5 or 6 years ago? Just any color there would be helpful.

Yes, Reuben, it's Nate. That's a good question. In terms of what we're experiencing, I wouldn't say there's a significant change between I-joist and open web or dimensional lumber. There might be some minor variations, likely related to home size and footprint. For instance, in markets like Phoenix, where slab on grade single-storey construction is common, the opportunity looks quite different compared to Denver, where two-storey homes with basements are more typical. The strength we've witnessed in states like Florida, Texas, and Arizona has been a significant factor in shaping the current opportunities for I-joist and framing materials moving into 2025.

Nate, regarding pricing, it has continued to perform well since then. I'm aware that you're experiencing various inflationary pressures. How should we assess the potential downside moving forward, considering the current volume environment? Additionally, what does the supply or capacity utilization in the industry look like today compared to about 5 or 6 years ago?

Yes. For the first quarter, our capacity utilization was quite strong given the current environment, operating between 75% and 80%. In April, it improved to just above that level, likely in the low 80s. While I don't recall specific figures from 2019, we feel optimistic about our operating rate in relation to the current demand environment. Additionally, it's crucial to maintain a strong connection between our manufacturing and distribution processes.

I am showing no further questions at this time. I would now like to turn it back to Nate Jorgensen, CEO, for closing remarks.

Great. Thanks. So we appreciate everyone joining us this morning for our update and earnings call. Thank you for your continued interest and support of Boise Cascade. Be safe and be well. Thank you.

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.