Boise Cascade Company Reports Fourth Quarter and Full Year 2024 Results

Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE:BCC) today reported fourth quarter net income of $68.9 million, or $1.78 per share, on sales of $1.6 billion. For the full year 2024, Boise Cascade reported net income of $376.4 million, or $9.57 per share, on sales of $6.7 billion. For 2023 comparative results, see the table below.

"As we close out 2024, I first want to express my gratitude to our associates as they have shown commitment to our values and steadfast support for our customers, suppliers, and each other. We had many accomplishments during the year, which included both divisions delivering solid financial results, additional growth in our distribution business, capital investments in support of our EWP growth strategy, and meaningful capital returns to our shareholders," stated Nate Jorgensen, CEO. "As we look forward to 2025, uncertainties surrounding the economy and residential construction activity will heavily influence the demand environment. However, our balance sheet remains strong, and we are well positioned to continue executing our reinvestment and growth strategies, while serving and supporting our customer and vendor partners."

Fourth Quarter and Year End 2024 Highlights

In fourth quarter 2024, total U.S. housing starts and single-family housing starts decreased 6% and 4%, respectively, compared to the same period in 2023. For the full year 2024, total housing starts decreased 4%, while single-family housing starts increased 7%, compared to 2023. Single-family housing starts are the key demand driver for our sales.

Wood Products

Wood Products' sales, including sales to Building Materials Distribution (BMD), decreased $30.0 million, or 7%, to $419.7 million for the three months ended December 31, 2024, from $449.7 million for the three months ended December 31, 2023. The decrease in sales was driven by lower sales prices for LVL and I-joists (collectively referred to as EWP) and plywood, as well as lower I-joist sales volumes. These decreases were offset partially by higher LVL and plywood sales volumes. Wood Products' segment income decreased $30.5 million to $33.6 million for the three months ended December 31, 2024, from $64.1 million for the three months ended December 31, 2023. The decrease in segment income was due primarily to lower EWP and plywood sales prices.

For the year ended December 31, 2024, sales, including sales to BMD, decreased $100.3 million, or 5%, to $1,832.3 million from $1,932.6 million in 2023. The decrease in sales was driven by lower sales prices for EWP, as well as lower plywood sales volumes and prices. Other sales related to lumber and residual byproducts also decreased. These decreases were offset partially by higher EWP sales volumes. Wood Products' segment income decreased $105.7 million to $231.5 million for the year ended December 31, 2024, from $337.1 million for the year ended December 31, 2023. The decrease in segment income was due primarily to lower EWP and plywood sales prices, as well as higher wood fiber and conversion costs. These decreases in segment income were offset partially by higher EWP sales volumes.

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

Building Materials Distribution

BMD's sales decreased $53.8 million, or 4%, to $1,438.8 million for the three months ended December 31, 2024, from $1,492.6 million for the three months ended December 31, 2023. Compared with the same quarter in the prior year, the overall decrease in sales was driven by a 2% decrease in both sales price and volume. By product line, commodity sales decreased 4%, general line product sales increased 1%, and EWP sales (substantially all of which are sourced through our Wood Products segment) decreased 11%. BMD segment income increased $0.2 million to $70.7 million for the three months ended December 31, 2024, from $70.5 million for the three months ended December 31, 2023. General and administrative expenses decreased $3.6 million, offset by increased depreciation and amortization expense of $3.6 million. The decrease in general and administrative expenses was due primarily to acquisition-related expenses in the prior year quarter for the BROSCO acquisition. Gross margins were flat when compared to the same quarter in the prior year.

For the year ended December 31, 2024, sales decreased $12.2 million, or less than 1%, to $6,166.5 million from $6,178.7 million in 2023. The decrease in sales was driven by a sales price decrease of 3%, offset partially by a sales volume increase of 3%. Excluding the impact of the BROSCO acquisition on October 2, 2023, sales would have decreased by 2%. By product line, commodity sales decreased 5%, general line product sales increased 7%, and EWP sales decreased 4%. BMD segment income decreased $32.4 million to $303.4 million for the year ended December 31, 2024, from $335.8 million for the year ended December 31, 2023. The decline in segment income was driven by increased selling and distribution expenses and depreciation and amortization expense of $37.4 million and $17.2 million, respectively. These decreases in segment income were offset partially by a gross margin increase of $15.1 million, resulting primarily from improved gross margins on general line products, offset partially by lower gross margins on EWP and commodity products. In addition, general and administrative expenses decreased $6.7 million, due primarily to $5.1 million of acquisition-related expenses in the prior year for the BROSCO acquisition.

Balance Sheet and Liquidity

Boise Cascade ended fourth quarter 2024 with $713.3 million of cash and cash equivalents and $395.7 million of undrawn committed bank line availability, for total available liquidity of $1,109.0 million. The Company had $450.0 million of outstanding debt at December 31, 2024.

Capital Allocation

During the year ended December 31, 2024, the Company used a combined $239.8 million of cash for capital spending and acquisitions. We expect capital expenditures in 2025, excluding potential acquisition spending, to total approximately $220 million to $240 million. Our 2025 capital expenditures range includes additional spending on multi-year investments to add I-joist production capabilities at our Thorsby, Alabama EWP mill, as well as the continuation of significant modernization projects at our Oakdale, Louisiana veneer and plywood mill. Our 2025 capital expenditures range also includes continued spending on the previously announced greenfield distribution centers in Texas and South Carolina in our BMD segment. This level of capital expenditures could increase or decrease as a result of several factors, including acquisitions, efforts to further accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, availability of engineering and construction resources, and timing and availability of equipment purchases.

For the year ended December 31, 2024, the Company paid common stock dividends of $228.8 million in regular and special dividends, which was comprised of $0.82 per share in regular dividends and a $5.00 per share special dividend. On February 7, 2025, our board of directors declared a quarterly dividend of $0.21 per share on our common stock, payable on March 19, 2025, to stockholders of record on February 24, 2025.

For the year ended December 31, 2024, the Company paid $194.9 million for the repurchase of approximately 1.5 million shares of our common stock. In January 2025, the Company repurchased an additional 250,000 shares of our common stock at a cost of approximately $30 million. Subsequent to these share repurchases, approximately 1.6 million shares were available for repurchase under our existing share repurchase program.

Outlook

Demand for the products we manufacture, as well as the products we purchase and distribute, is correlated with new residential construction, residential repair-and-remodeling activity, and light commercial construction. Residential construction, particularly new single-family construction, is the key demand driver for the products we manufacture and distribute. As reported by the U.S. Census Bureau, housing starts were 1.37 million in 2024. Current industry forecasts for U.S. housing starts are approximately 1.35 million in 2025. Single-family starts in 2024 outpaced 2023 levels by 7%, and are expected to remain at approximately 1.0 million, despite the affordability challenges consumers are facing in the current rate environment. Multi-family starts declined sharply in 2024 and are expected to continue to face headwinds in 2025 due to prohibitive capital costs for developers, combined with elevated levels of multi-family unit completions in 2023 and 2024. We expect 2025 to reflect modest growth in home improvement spending, as the age of U.S. housing stock, elevated levels of homeowner equity, and recent improvement in existing home sales will provide a favorable backdrop for repair-and-remodel spending. Ultimately, macroeconomic factors, the level and expectations for mortgage rates, home affordability, home equity levels, home size, levels of new and existing home inventory for sale, and other factors will influence the near-term demand environment for the products we manufacture and distribute.

As a manufacturer of certain commodity products, we have sales and profitability exposure to declines in commodity product prices and rising input costs. Our distribution business purchases and resells a broad mix of products with periods of increasing prices providing the opportunity for higher sales and increased margins, while declining price environments expose us to declines in sales and profitability. Future product pricing, particularly commodity products pricing and input costs, may be volatile in response to economic uncertainties, industry operating rates, supply-related disruptions, transportation constraints or disruptions, net import and export activity, inventory levels in various distribution channels, and seasonal demand patterns. In addition, changes in laws or government regulations, such as the imposition of tariffs, could impact our product pricing and input costs.

About Boise Cascade

Boise Cascade Company is one of the largest producers of engineered wood products and plywood in North America and a leading U.S. wholesale distributor of building products. For more information, please visit the Company's website at www.bc.com.

Webcast and Conference Call

Boise Cascade will host a webcast and conference call to discuss fourth quarter and full year earnings on Friday, February 21, 2025, at 11 a.m. Eastern.

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

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

Use of Non-GAAP Financial Measures

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

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

Forward-Looking Statements

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

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

Summary Notes to Consolidated Financial Statements and Segment Information

The Consolidated Statements of Operations, Segment Statements of Operations, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information presented herein do not include the notes accompanying the Company's Consolidated Financial Statements and should be read in conjunction with the Company's 2024 Form 10-K and the Company's other filings with the Securities and Exchange Commission. Net income for all periods presented involved estimates and accruals.

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

The following table reconciles segment income and unallocated corporate costs to Segment EBITDA, EBITDA and Adjusted EBITDA for the (i) three months ended December 31, 2024 and 2023, (ii) three months ended September 30, 2024, and (iii) year ended December 31, 2024 and 2023:

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