Good morning, my name is Steve, and I'll be a conference facilitator today. At this time, I would like to welcome everyone to Boise's Cascade 3rd Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Chris Foray, Vice President, Finance and Investor Relations. Mr. Foray, you may begin your conference.

Thank you, Steve, and good morning, everyone. We'd like to welcome you to Boise Cascades' third quarter 2025 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO, Jeff Strum, our COO, Kelly Hibbs, our CFO, Troy Little, head of our wood products operations, and Joe Barney, head of our building materials distribution operations. Turning to slide two, 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 or loss to segment EBITDA. I will now turn the call over to Nate.

Thanks, Chris. Good morning, everyone. Thank you for joining us on our earnings call today. I'm on slide number three. September 2025, U.S. housing starts data has not been released by the U.S. Census Bureau. However, when comparing July 2025 and August 2025, how August 2025 housing starts at the same period as 2024, total U.S. housing starts increased 2%, while single-family housing starts decreased 3%. Our consolidated third-quarter sales of $1.7 billion were down 3% from third-quarter 2024. Our net income was $21.8 million, or $0.58 per share, compared to a net income of $91 million, $2.30 in wood products we experienced sequentially lower sales volumes and competitive pricing pressure in EWP. Plywood markets, like other commodities, continue to experience weak pricing given the underlying demand environment. In BMD, our customers expanded reliance on us for next day's delivery service across a range of products to help to mitigate the otherwise subdued environment. Given this backdrop, we were still able to post good earnings for the third year. We have great clarity in our business model, wavering commitment to our core values enable us to remain focused on the execution of our strategic priorities. Our two-step distribution model, in tandem with our market-leading EWP and plywood franchises, will continue to deliver exceptional value to both our customers and vendor partners, providing reliable access to product and operational flexibility that are vital in dynamic markets. Kelly will now walk through our segment financial results, capital allocation priorities. Thank you, Nate. Good morning,

everyone. We're product sales and down 13%. The decrease in segment EBITDA was due primarily to lower EWP and as well as higher per unit. BMD reported segment EBITDA 10%, 7%. BMD's EBITDA, BMD's third quarter EBITDA margin is below our normalized level of earnings power, but a very good result at the same time is in. But now it's like capital expenditure in the nine months ended. We remain committed to the capital plan. Looking forward to 2026 weeks. Speaking to shareholder return, our board of directors are fortunate that our solid financial,

For BMD, the extended weakness in the residential market has highlighted the resilience of our distribution business. We've seen an increased customer reliance on our auto-warehouse business across our full suite of products. As the uncertainty continues headed into 2026, we stay on the near-term environment, remain confident in the long-term demand drivers of residential trends, including have been waiting on the sidelines to enter the market. Care remodeling space, equity turnover, and consumer confidence will improve as interest rates decline and strong fundamentals for both new residential construction and repair and remodeling and the foundation for the industry. Thank you. We will now begin the question and answer

session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble Arashita. First question comes from Susan McClary with Goldman Sachs. Please go ahead.

Thank you. Good morning, everyone. My first question is on the general line part of the business. Can you talk to the share gains that you are realizing in there, how you're working with the various partners in this kind of an environment, and what that suggests for your ability to continue to see growth next year, even if housing in the macro stays more challenging?

Yeah, Sue, hi, this is Joe. I'll start with that one. What I'll tell you is that demand held up really well with our general line product categories in the third quarter. Part of the reason, I think, is that we've made significant investments across our footprint in added capacity right we put really at most of our locations we've added lay down space we've added warehouse space and we've done it intentionally so that we could bring in a broader mix of general line products carry them on a deeper scale you know our our suppliers that we work with our key partners are consistently adding new products to their to you know what they bring to the market and we want to make sure that we have the ability and the capacity to support their growth, as well as support our own. So we've invested in that. You know, we've also looked at bringing new products in the general line category to market. We've taken some risks there. You know, we have been focused on and achieved growth with our home center business, special order business that we do at the home centers. So that's helped us with the general line categories. We've focused on and grown our specialty dealer business, certainly in third quarter, so that's been a focus for us. We've been successful at that. And we've grown in the multifamily category, and that's been a focus for us. As single-family housing starts have been flat or depressed, we've focused significantly into the multifamily arena. We're going to continue to focus on the growth of our multifamily business in the quarters to come. And I would tell you that we believe that our market share growth in certain general line categories that we think we've captured market share. There have been competitors of ours, who have exited different product categories across the country, and they've left a void in the market as they've exited. And our teams have done a really good job of stepping in and filling that void and taking that market share. And so, you know, we expect now that we have that capacity and we will continue to see that growth in the quarters to come. And then last, I think I mentioned our Doran Millwork business and the investments that we've made there. And we do continue to strengthen and improve operations from a door and millwork standpoint, as well as our sales growth and margin opportunities.

Okay, that's great color. And then maybe moving over to EWP, it's great to hear that you think that price there has bottomed and there's the potential for some growth next year, given what we're hearing and seeing from the builders. Can you talk to the competitive dynamics that you're seeing with EWP? What gives you that confidence on the pricing side? And any thoughts on the upside or downside to that, just given the affordability pressures the builders are facing?

Hey, good morning, Sue. I'll start with kind of what we're seeing, what we've seen and what we're seeing this year, and then turn it over to CFB. You know, as we noted, we were down 5% or 6% quarter over quarter, and that was primarily due to two things. Early in the quarter, it was continued price pressure and matching competitive issues. And then the other one was we had the tariff. We weren't able to fully pass that on. And then starting, it looked like about August, the prices started to stabilize, and they've continued to stabilize, you know, similar to what others have reported. So that's where we're seeing that maybe we've reached the bottom there.

and then looking into QFAT throughout the quarter years.

Okay, great. Thank you for all the color, and good luck with the quarter.

Thanks, Jim.

The next question comes from Michael Roxland with Truist Securities. Please go ahead.

Yeah, thank you, Nate, Kelly, Joe, Troy, Chris, for taking my questions. You know, first question I had is obviously just following up on the DMZ question and the mix-up in general line. As you think about margins in B&D, what do you think are the constraints as you see it in terms of generating even higher margins, even dot margins, that is, in terms of maybe high single digits or low double-digit type margins as some of your distributor peers currently are?

All right, Mike. Thanks for the question. So I guess I would start with on gross margins for B&D. At their term here, We feel, you know, really good about our ability to maintain the 15-plus percent margins that we've been putting. It's like this. The service is certainly relevant, and, again, we continue to see a good pull through there. And then to your point, you know, where might we go from here? Again, we continue to look to rich in the product mix, and that's, you know, more general line products, which do give us more gross margin opportunity. And at the same time, I don't want to discount our teams in terms of what we've been doing in terms of BWP sell-through and also commodities where we've been doing a really nice job in a really tough environment in particular in commodities. And with commodities at the very low levels that they are today, certainly near term here, if we get any energy in the commodity markets, we could hear it.

And then I guess maybe one final volume, you know, and we have seen that happening quarter to quarter, room for margin improvement there. You know, as we become better operators in our door and mill work investments, and we have the quarter to quarter, we continue to move in that direction. And as we become better operators and as we invest in our pre-finished business, you know, as we bring our lead times in check, as we become better operators, we are finding that we are growing in this, which will add to our margin opportunities in a rising market, and we do it really quick.

No, it's very helpful. Appreciate the call there, Joe and Kelly. You know, second question is, it really isn't that you're beholden to the single-family housing market to some degree. You know, is there anything that you can do in this environment to further improve mill profitability? You know, you highlighted a number of times how you're basically the mill, because of the capital investments you made over the last couple of years, the mills themselves are ripe to generate significant profitability when single-family returns. But is there anything you can do now So additional cost takeout are the things that you can do that could situate the company for even greater margin expansion when the cycle turns?

I'll look at it from the standpoint, like the cost improvement activities that we're doing at the mill level. You know, that's something that probably got muted in the third quarter and may continue to get muted with the lower volumes, you know, market-related downtime volumes. But behind that, the operations have what we call our site improvement plans. And each of the locations are definitely working a very detailed plan for 2020. We are making sure that we're filling all our positions. You know, those are support-type functions, but instrumental in our process improvement to reduce our costs, increase our efficiencies. And then we also have our group working on innovation. And so we do actually have a couple of projects planned that we're looking at. All those should help contribute.

And there's one reaction that we may regret later in the long term. And so we really need to be thoughtful about how we manage our capacity, including our crews, so that when the market turns, we don't get –

Totally got it, Kelly. It makes a ton of sense. And just one last one I'll turn it over. We said growing presence in multifamily. Can you just remind us right now where that presence stands currently in multifamily, whether it be maybe through AWP if you want to talk about the whole portfolio and where you expect it to be, let's say, in 2026 and maybe provide a five-year outlook.

So it's not a large part of either of our businesses today. I don't probably, Mike, but we're probably in the, you know, we're probably single family is still the big driver for us, and then we're probably something like 10 and 10 there between.

Thank you, Kelly.

The next question comes from Kurt Inger. D.A. Davidson, please go ahead.

Great, thanks, and good morning, everyone. Troy, I just wanted to go back to the discussion around competitive dynamics in EWP, and if I heard you right, you kind of talked about the stabilization coming through in August. Can you maybe just put a little bit more color around that? Is it less dealer and builder business being put to bid? Is it, you know, maybe a little bit more of a balance in terms of, you know, the tradeoff between pricing and volume? You know, what do you think was really the catalyst there to kind of reach the stabilization?

Yeah, I think, you know, as the market starts slowing coming out of Q2 and into Q3, there was capacity available. And so I think there was room to move on price in the industry, and people were out there trying to preserve and or grow share as things came off. You know, we continue to see that for, you know, several quarters now. And, you know, I think we just got to the point, we addressed the markets where that was necessary for volumes, and we were able to do that by and large. and now we're in a position, you know, the costs have come up during that time.

And it sort of ties into my next question. You know, I think realistically, right, like pricing is difficult to predict, but a lot of it comes back to single-family activity. But it does seem like channel inventories are lean. Is there a scenario where seasonally we get into the spring period next year And even if structurally, you know, housing activity isn't significantly stronger, you feel like there could really be some tension there in the market just based on, you know, what you see in terms of your customer inventories at this stage?

I'll start. To me, the channel, I think, is really well balanced in terms of the inventory levels and kind of that risk-reward, both on demand and everything. And so we're headed next year, the marketplace that someone unexpected or there's maybe, I think there could be maybe some, you know, different urgency to the marketplace. There's not a lot of access.

Yep, that all makes sense. And then lastly, I just wanted to go back to the door and mailwork performance. Can you just talk about, I guess, the sales performance thus far in 2025? five and you know as some of these new facilities get up and running is that something where you would expect even in a tepid demand environment just given the capacity that you have and the focus there that you could really drive a healthy amount of kind of above market growth or how

dependent on that is you know underlying demand from here hey Curtis Jeff uh I'd say overall Well, Milwaukee has been challenging this year with the price pressures and everything else. There's no advance or what's about that. However, we have a lot of new facilities, and we have a lot of new locations that we're working into this business. And every day that goes by is a day that we get better and we improve and we get the right people in place. And the opportunity is that's there. So we're definitely, you know, expecting to see more growth, regardless of what the market does, just because we're going to operate significantly better. Additionally, we have some locations that are constrained. We are addressing those. So we're excited for what the upside is for us.

Okay. Appreciate all the color guys.

The next question comes from George Steffos with Bank of America Securities. Please go ahead.

Hey, good morning, guys. This is Brad Barton on for George. You know, just, you know, if we go back to the AZEC announcement, you know, when we think about the genesis of the deal, you know, can you just talk to the puts and takes that you were considering on the move? And then, you know, did AZAC come to you? Did you go to them? And then, you know, how do you kind of see that impacting your Hardy lineup in those specific markets and maybe even across the whole network as well?

Yeah, I will start with that one. So let me just first say that we are very excited about the opportunity. to partner with Hardy in the Baltimore market. You know, it's a big decking market, so we see it as a big opportunity. We have not had decking in that market before, so this is net new revenue for us. It's not a revenue shift from a different product category. We haven't had it, so this is net new revenue, and it's a big opportunity for us. So we're excited about that. We're excited about the full suite of products that we're going to be able to offer. in that market. So we see a lot of upside revenue potential for us, specifically to the Baltimore Pittsburgh market. Saying that, you know, we also have grown our market share with Trex across the country. So we've done really well with that brand. So, you know, our plan is to continue to support both partners, continue to grow our market share as we have in all of those

markets across the country. Okay, great. And then you just, I guess one follow-up, and I think you guys touched on this a little bit, but, you know, are there any kind of, any signs that you're seeing early in the quarter that you can kind of point to as signs of life or green shoots, not just for the remainder of the quarter into next year, but maybe even for the spring building

season? Jeff, I just said one thing that we are seeing and experiencing is that there are that reaches in the multifamily space and we're seeing some activity we're seeing a lot of quoting that's going on we have some projects that we know that are going to kick off to get us through the announce of the year and into the beginning of next year so we feel good about that great i'll

turn over there thanks guys the next question comes from jeff stevenson with loop capital

please go ahead hi thanks for taking my questions today how much of an impact did the operating inefficiencies related to the ramp and production at your Oakdale facility have on wood products margins in the third quarter, and will that continue to be a drag on segment margins over

the next several quarters? Yeah, this is Troy. Yeah, it's a little bit hard to tell because we've had that market-related downtime in there, but that team has been, you know, trying to work on all the machine centers when we essentially touched all the machine centers, and so honestly, working through that, which I would describe as, you know, the operational issues coming out of a large project that they've been working through in the third quarter. So, we didn't see a huge difference specific to Oakdale, you know, say Q3 impacts versus orders. But moving forward, we would expect lower that cost. Got it. Got it. No, thanks for walking me through that.

And then over the past year, you've announced multiple expanded partnership agreements to strengthening your distribution relationship with key suppliers. And the most recent one, obviously, is James Hardy. And, you know, I wondered if you could talk more about how these agreements have better positioned the company's general line distribution business moving forward and, you know, whether there could be additional opportunities to, you know, expand partnerships with other key suppliers.

Yeah, I'll start there. I think, you know, we're always looking for opportunities to expand partnerships. But, you know, we're also very focused on the partnerships that we've got and the new products that they bring to market. Trex is a great partner for us. We've grown market share with them. We're going to continue to grow market share with them across the country. Hardee has been a great partner for us in siding across the country, and now we're exploring a new opportunity with them in the Baltimore market. Again, I just reiterate it's a significant decking market, and we haven't had that category before there. So looking at that, we're looking at new partnerships as far as doors and millwork goes. So we are always absolutely looking to expand. We've added the space and the capacity to do it. So we are going to continue to look into whatever partnerships we have available that we think we can generate sales growth, revenue growth, and margin growth.

And then one last one, just on how you're planning to balance M&A with share repurchases moving forward, giving the market pullback. You know, would you expect to be aggressive with the new $300 million share repurchase program?

Yeah, good morning, Jeff. I'll take that one. In priority order, you know, hit base, look to do organic growth projects, and then also M&A, if the fit and the price is right. But I would say, you know, absent any meaningful M&A, to continue to be active.

Thank you. To ask a question, you may press star and one. The next question comes from Ruben Garner with Benchmark. Please go ahead.

Good morning, everybody. Let's see. So if I'm doing the math right, and I know you didn't explicitly give top-line guidance, but it looks like the distribution segment EBITDA margin is going to dip into the threes for the first time in a while. The third quarter was obviously lower than the second, and I get that there's some seasonality. How should we think about what's going on there? Like, has competition picked up? Where do we think that things will stabilize? And how do we think about, you know, next year, assuming that the housing market in general is kind of consistent with what we've seen of late?

Yeah, good question. I guess I would start with saying that this isn't a market share degradation or any more position in how two-step distribution shows up in these sorts of markets. So, really, what's embedded in the guidance really is really truly a function of just seasonal swelling. that we expect to see you know november and december you got you only got 18 sales days in november and 21 sales days december you got weather so you got some seasonal seasonal events so so yeah could we could we dip into the high threes in terms of the event down margin yeah sure we could just given the seasonal nature of it but i wouldn't um i wouldn't uh i would not pull back from what we view as the, you know, when we get to a normalized cycle over a normalized year that we can be it can start with a five in terms of our even down margin. So I feel really good about how we're positioned there, Ruben. It's really just a seasonal event that you're seeing in the fourth quarter.

Okay, great. That's really helpful. And then how do we think about it looks like your inventory I guess at the Inc. level. I don't have segments on that, but your inventory as a percentage of revenue picked up the last couple of years. Is that a function of some of the investments in distribution and growing general line? Is that some kind of signal that you're optimistic about, you know, the market coming back as we get closer to 26 and you want to make sure you have the materials, or is there some other factor driving that delta?

It's a function of the growth that we've done. We've added a handful of locations via M&A and via organic growth opportunities, and then it really comes back to our state of goal that we always want to be in stock, and we feel good about our inventory position. We're not too heavy. I think we're in a good spot. But, yeah, and then we do feel good, obviously, about the, you know, come back out of 2026, we're very well positioned if we start to see some more energy here in the spring building season.

Okay, great. Thanks, guys, and good luck.

Thanks, Rupert.

The next question comes from Ketan Mamuntra with BMO Capital Markets. Please go ahead.

Thank you. Maybe to start with, on the EWP side, Troy, I mean, Your volumes in 2025 are still kind of higher than, you know, what it was in 2021, 2022, when housing demand was stronger. Can you talk about kind of what is driving there, whether there's some share gains or things that you are doing differently?

Yeah, I'd say throughout 2025, you know, in terms of looking for opportunities, we believe we have some share gains that we're trying to maintain. Our order files throughout Q3, you know, comparatively were lower but consistent throughout the quarter. And as we move into Q4, other than the seasonality around that, it still seems to be fairly consistent, you know, what we've seen so far.

Okay. Got it. And then just switching to the distribution side, really nice to see that, you know, growth in gender line. You talked earlier about sort of, you know, doors still being under some pressure. Can you talk about what is, where you are seeing sort of growth in the general line business?

Yeah, I think we're seeing growth in the general line. Again, you know, market share gains in certain product categories, decking being one of them. So we've seen market share gains as some of our competitors or other distributors have exited different categories across the country. We've stepped in and filled those loids. You know, and so we've seen market share growth that way. Again, multifamily business, and I really think in the door and mailwork side, we're starting to see gains and we're moving forward, moving that capacity and our ability there forward.

Thank you. Maybe just say that the show is kind of what we enjoy, we're really good at, and so we certainly serve our customers.

Got it. Now that's helpful. I'll turn it over.

Thank you. This concludes the question and answer session. I would like to turn the conference back over to Nate Jogudson for any closing remarks.

Join us on our call this morning for update, and thank you for keeping me well.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.