Q1 2024 Boise Cascade Co Earnings Call

Chris Forrey: Good morning, everyone. I would like to welcome you to Boise Cascade's first quarter 2024 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO, Kelly Hibbs, our CFO and treasurer, Troy Little, head of our wood products operations, and Jeff Strom, 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 Gap Net Income to EBITDA, Adjusted EBITDA, and Segment Income to Segment EBITDA. I will now turn the call over to Nathan. Thanks, Chris. Good morning, everyone.

We welcome you to avoid the Cascades first quarter 2024 earnings call and business update joining me on today's call are Nate Jorgensen, our CEO Kelly <unk>, our CFO and Treasurer, Troy Little head of our wood products operations and Jeff's Trump 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.

Nathan R. Jorgensen: Also please note that the appendix includes reconciliations from our GAAP net income to EBITDA adjusted EBITDA and segment income to segment EBITDA I will now turn the call over to Nate.

Nathan R. Jorgensen: Thank you for joining us for our earnings call today. I'm on slide number three. Total U.S. housing starts only increased 1%, but single-family starts increased 27% compared to the prior year quarter.

Nathan R. Jorgensen: Thanks, Chris Good morning, everyone. Thank you for joining us for our earnings call today I'm on slide number three.

Nathan R. Jorgensen: Total U S housing starts only increased 1%. However single family starts increased 27% compared to the prior year quarter. Our consolidated first quarter sales of $1 6 billion were up 7% from first quarter of 2023.

Nathan R. Jorgensen: Our consolidated first-quarter sales of $1.6 billion were up 7% from the first quarter of 2023. Our net income was $104.1 million, or $2.61 per share, compared to a net income of $96.7 million, or $2.43 per share, in the year-ago quarter. Both of our businesses delivered strong financial results during the quarter, which were influenced by seasonal factors and the relative strength of new single-family housing starts. In addition, our expanded capital spending program is progressing consistent with our expectations as we provide meaningful returns to our shareholders through share price gains, dividends, and share repurchases.

Nathan R. Jorgensen: Our net income was $104 1 million or $2 61 per share compared to net income of $96 7 million or $2 43 per share in the year ago quarter.

Nathan R. Jorgensen: Both of our business has delivered strong financial results during the quarter, which were influenced by seasonal factors and the relative strength of new single family housing starts.

Nathan R. Jorgensen: In addition, our expanded capital spending program is progressing consistent with our expectations as we providing meaningful returns to our shareholders through share price gains dividends and share repurchases I want to thank our associates across the company. We continued to execute our strategies that position us to serve and support each of our stakeholders Kelly will now walk through our segment financial results.

Nathan R. Jorgensen: I want to thank our associates across the company who continue to execute our strategies that position us to serve and support each of our stakeholders. Kelly will now walk through our segment financial results and provide an update on the capital allocation in more detail, after which I'll provide our outlook before we take your questions.

Nathan R. Jorgensen: <unk> and provide an update on our capital allocation in more detail after which I'll provide our outlook before we take your questions.

Nathan R. Jorgensen: Thank you, Nate. Good morning, everyone. With product sales in the first quarter, including sales for our distribution segment of $468.9 million, compared to $437.4 million in the first quarter. With product sales, we reported segment EBITDA of $95.6 million, up from EBITDA of $93.2 million reported a year ago. The increase in segment EBITDA is due primarily to higher EWP sales volumes and higher plywood sales prices. These increases were offset partially by lower EWP prices and higher wood fiber costs.

Kelly: Thank you Nate and good morning, everyone wood products sales in the first quarter, including sales to our distribution segment were $468 9 million compared to $437 4 million in first quarter 2023 Wood products reported segment EBITDA of $95 6 million up from EBITDA of $93 2 million reported in the year ago.

Kelly: Quarter.

Kelly: The increase in segment EBITDA was due primarily to higher AWP sales volumes and higher plywood sales prices. These increases were offset partially by lower <unk> prices and higher wood fiber costs.

Kelly E. Hibbs: BMD sales in the quarter were $1.5 billion, up 9% from the first quarter of 2023. BMD reported segment EBITDA of $83.6 million in the first quarter, compared to segment EBITDA of $76.8 million in the prior year. The increase in segment EBITDA was driven by a gross margin increase of $22.9 million, resulting primarily from higher sales volumes and improved margins on general line and commodity products. The Gross Margin Improvement was offset partially by increased selling and distribution, and depreciation and amortization expense of $16.5 million and $4 million, respectively. We expect total company depreciation and amortization in 2024 to be approximately $140,000. In addition, our anticipated effective tax rate remains at 25%.

Kelly: BMD sales in the quarter were $1 5 billion up 9% from first quarter 2023, BMD reported segment EBITDA of $83 6 million in the first quarter compared to segment EBITDA of $76 8 million in the prior year quarter.

Kelly: The increase in segment EBITDA was driven by a gross margin increase of $22 $9 million, resulting primarily from higher sales volumes and improved margins on general line and commodity products. The gross margin improvement was offset partially by increased selling and distribution expenses and depreciation Asian in amortization expense of $16 5 million and 4 million.

Kelly: Dollars respectively.

Kelly: We expect total company depreciation and amortization in 2024 to be approximately a $140 million. In addition, our anticipated effective tax rate remains at 25%.

Kelly E. Hibbs: Turning to slide 5, on a year-over-year and sequential basis, first quarter volumes for LVL were up 31% and 16%, respectively, and IJOIS volumes over the same comparative periods were up by 46% and 5%. Our EWP volume growth exceeded the underlying single-family housing start increases for both comparative periods. The central pricing for both IJOYS and LVL was down 4% due to continued pricing pressure in the market. Looking forward to the second quarter, production builders have maintained optimism in spite of increasing mortgage rates, and we expect our AWP volumes to increase sequentially.

Kelly: Turning to slide five on a year over year and sequential basis first quarter volumes for LVL were up 31% and 16% respectively. An I joist volumes over the same comparative periods were up by 46% and 5% our AWP volume growth exceeded the underlying single family housing start increases for <unk>.

Kelly: Both comparative periods.

Kelly: Central pricing for both I joist, and LVL was down 4% due to continued pricing pressure in the market.

Kelly: Looking forward to the second quarter production builders have maintained optimism in spite of increasing mortgage rates and we expect our AWP volumes to increase sequentially on pricing, we expect sequential price erosion for moderate during the quarter.

Kelly E. Hibbs: On pricing, we expect sequential price erosion to moderate during the quarter. Turning to slide six, our first quarter plywood sales volume and wood products with 372 million feet compared to 406 million feet in first quarter 2020. As expected, plywood volumes decreased during the current quarter as we shifted a higher proportion of our internally produced veneer into EWP production given improved demand for EWP. The $378 per thousand average plywood net sales price in the first quarter was up 3% from the first quarter of 2023 and up 1% sequentially.

Kelly: Turning to slide six our first quarter plywood sales volume in wood products was 372 million feet compared to 406 million feet in first quarter 2023 as expected plywood volumes decreased during the current quarter as we shifted a higher proportion of our internally produced veneer into <unk> production.

Kelly: Improved demand for AWP.

Kelly: 378 per thousand average plywood net sales price in the first quarter was up 3% from first quarter 2023, and up 1% sequentially. Thus far in the second quarter 2020 for plywood price realizations were consistent with our first quarter average. However, we expect downward pricing pressure as we move through the second quarter.

Kelly E. Hibbs: Thus far in the second quarter of 2024, plywood price realizations are consistent with our first quarter average. However, we expect downward pricing pressure as we move through the second quarter given uncertainty in the panel. Moving to slides seven and eight, VMD's first quarter sale for $1.5 billion, up 9% from first quarter 2023 driven by sales volume increases of 12% offset partially by sales price decreases of My product line commodity sales increased 1%, general line product sales increased 16%, and sales of EWP increased 12%. Gross margin dollars increased $22.9 million when compared to the same quarter last year.

Kelly: Given uncertainty in the panel markets.

Kelly: Moving to slide seven and eight Bmd's first quarter sales were $1 5 billion up 9% from first quarter 2023, driven by sales volume increases of 12% offset partially by sales price decreases of 3% byproduct line commodity sales increased 1% General line product sales increased 16% and <unk>.

Kelly: That AWP increased 12%.

Kelly: Gross margin dollars increased $22 9 million when compared to the same quarter last year as higher margin dollars on general line and commodity products were offset partially by lower margin dollars generated on AWP.

Kelly E. Hibbs: Higher margin dollars on general line and commodity products were offset partially by lower margin dollars generated on EWP. In addition, B&B's overall gross margin percentage was 15.1%, up 30 basis points from the 14.8% reported in the first quarter. The MD's EBITDA margin was 5.6% for the quarter, flat with the year-ago quarter and up 20 basis points. B&B sales pace thus far in second quarter 2024 has moderated slightly from the strong levels experienced in March, but it's still approximately 5% above the first quarter daily sales average.

Kelly: In addition, Bmd's overall gross margin percentage was 15, 1% up 30 basis points from the 14, 8% reported in first quarter of 2023 and down 10 basis points sequentially.

Kelly: Bmd's EBITDA margin was five 6% for the quarter flat with the year ago quarter, and up 20 basis points sequentially.

Kelly: <unk> sales pace, thus far in second quarter 2024 has moderated slightly from the strong levels experienced in March, but it's still approximately 5% above first quarter daily sales averages, although commodity markets have created hesitancy in the marketplace. Currently we anticipate our daily sales pace will strengthen as we move through the quarter given.

Kelly E. Hibbs: Although commodity markets have created hesitancy in the marketplace currently, we anticipate our daily sales pace will strengthen as we move through the quarter, given a healthy single-family environment and occasionally better weather. Second quarter EBITDA margins will be sensitive to the ultimate sales pace for the period and the trajectory of product prices. Moving to slide 9. This slide shows the weak pricing environment for lumber over the last five quarters. As such, recent capacity reductions in certain geographies have been announced, and there is speculation of additional production curtailments if weak pricing persists. Moving to slide 10, the late first quarter increase in composite panel prices was driven by OSB due to strength in single family starts and supply limitations.

Kelly: Healthy single family environment, and seasonally better weather.

Kelly: Second quarter, EBITDA margins will be sensitive to the ultimate sales pace for the period and the trajectory of product pricing.

Kelly: Moving to slide nine.

Kelly: This slide shows the weak pricing environment for lumber over the last five quarters as such recent capacity reductions in certain geographies had been announced and there are speculation and additional production curtailments if weak pricing persists.

Kelly: Going to slide 10, the late first quarter increase in composite panel prices was driven by OSB due to strength in single family starts and supply limitations as we enter the second quarter sharp price declines in OSB have created cautious buyer behavior across panel markets in general.

Kelly E. Hibbs: As we enter the second quarter, sharp price declines in OSB have created cautious buyer behavior across panel markets in general. For our distribution business, periods of uncertainty create both risk and opportunity. Despite the uncertainty in commodity markets currently, we will maintain our longstanding approach to having inventory on hand to support our customer base.

Kelly: For our distribution business periods of uncertainty trade, both risk and opportunity. Despite the uncertainty in commodity markets. Currently we will maintain our long standing approach to having inventory on hand to support our customer base.

Kelly: I'm now on slide 11.

Kelly E. Hibbs: We have capital expenditures of $34 million in the first quarter, with $19 million of spending on wood products and $15 million of spending in VMD. Our capital spending range for 2024 remains at $250 to $270 million, with the pace of spending expected to accelerate as we move forward. Speaking of shareholder returns, we paid $11 million in regular dividends to shareholders and completed the repurchase of approximately $206,000 of our common shares for $27 million in the first quarter.

Kelly: We had capital expenditures of $34 million in the first quarter with $19 million of spending in wood products and $15 million of spending in BMD.

Kelly: Our capital spending range for 2024 remains at $250 million to $270 million with the pace of spending to accelerate as we move through the year.

Kelly: Speaking to shareholder returns, we paid $11 million and regular dividends to shareholders and completed the repurchase of approximately 206000 of our common shares for $27 million in the first quarter. We have approximately one 7 million shares still available for repurchase under our share repurchase program.

Kelly E. Hibbs: We have approximately 1.7 million shares still available for repurchase under our share repurchase program. In addition, our Board of Directors recently approved a 20 cents per share quarterly dividend for shareholders of record as of June 3rd, payable June 17th. In summary, our balance sheet remains very strong, and we are committed to our balanced approach to capital allocation that includes ongoing investment in our existing asset base, organic growth projects, and returns to our shareholders.

Kelly: In addition, our board of Directors recently approved a <unk> 20 per share quarterly dividend for shareholders of record as of June 3rd payable June 17.

Kelly: In summary, our balance sheet remains very strong and we are committed to our balanced approach to capital allocation that includes ongoing investment in our existing asset base organic growth projects and returns to our shareholders looking forward unless a meaningful M&A transaction surfaces, we would expect to return additional capital to our shares.

Kelly E. Hibbs: Looking forward, unless a meaningful M&A transaction surfaces, we would expect to return additional capital to our shareholders during the balance of 2024 via special dividends or share return, or a combination of the two. I will turn it back over to Nate to discuss our business. Thanks, Kelly. I'm on slide number 12.

Kelly: Holders during the balance of 2024 via special dividends or share repurchases or a combination of the two I will turn it back over to Nate to discuss our business outlook.

Nathan R. Jorgensen: Current industry forecasts for 2024 US housing starts are generally consistent with actual housing starts of 1.42 million in 2023, as reported by the US Census Bureau. However, home affordability remains a challenge for many consumers due to the cost of housing combined with elevated mortgage rates. However, with low unemployment and an undersupply of existing housing stock available for sale, new residential construction is expected to remain an important source of supply for homes. Recent pressures on multifamily starts are expected to continue due to the increased capital cost for developers combined with cooling, rents, and elevated supply.

Nathan R. Jorgensen: Thanks, Kelly I'm on slide number 12 current industry forecast for 2020 for U S. Housing starts were generally consistent with actual housing starts of 142 million a 2023 as reported by the U S Census Bureau home affordability remains a challenge for many consumers due to the cost of housing combined with elevated mortgage rates, however, with low.

Nathan R. Jorgensen: Unemployment and an under supply of existing housing stock available for sale new residential construction is expected to remain an important source of supply for homebuyers.

Nathan R. Jorgensen: Recent pressures on multifamily starts are expected to continue due to the increased capital cost for developers combined with cooling rents and elevated supply.

Nathan R. Jorgensen: Regarding home improvement spending, the age of the U.S. housing stock and elevated levels of homeowner equity have provided a favorable backdrop for repair and remodel spending. However, in 2023, year-over-year growth rates and renovation spending moderated due to economic uncertainty and higher borrowing costs.

Nathan R. Jorgensen: 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 in.

Nathan R. Jorgensen: In 2023 year over year growth rates and renovation spending moderated due to economic uncertainty.

Nathan R. Jorgensen: Borrowing costs.

Nathan R. Jorgensen: While home improvement spending is expected to remain healthy compared to history, recent industry forecasts project mid-single-digit declines in 2024. Ultimately, macro-environment factors that level expectations for mortgage rates, home affordability, home equity levels, and other factors will likely influence the near-term demand environment for products we manufacture. As Kelly mentioned, we remain well positioned to invest in our existing asset base and organic growth projects in both businesses, as reflected in our robust 2024 capital spending plan.

Nathan R. Jorgensen: My home improvement spending is expected to remain healthy compared to history recent industry forecast project mid single digit declines in 2024, ultimately macro macro environment factors the level of expectations for mortgage rates home affordability home equity levels and other factors are likely influence the near term demand environment for products, we manufacture and.

Nathan R. Jorgensen: <unk>.

Nathan R. Jorgensen: As Kelly mentioned, we remain well positioned to invest in our existing asset base and organic growth projects in both businesses as reflected in our robust 2024 capital spending plans are longer term view on housing fundamentals remains favorable supported by demographic trends and under built housing stock.

Nathan R. Jorgensen: A longer-term view on housing fundamentals remains favorable, supported by demographic trends and under-built housing stock. As such, we remain clearly focused on the execution of our strategies and have great conviction around the investments that continue to grow the company. Thank you for joining us today and for your continued support and interest in Boise Cascade. We would welcome any questions at this time. Corey, would you please open the phone lines?

Nathan R. Jorgensen: Such we remain clearly focused on the execution of our strategies and have great conviction around the investments that continue to grow the company. Thank.

Nathan R. Jorgensen: Thank you for joining us today and for your continued support and interest in Boise Cascade, We would welcome any questions. At this time Corie would you. Please open the phone lines.

Operator: Thank you. At this time, we will now conduct a question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Corie: At this time, we will now conduct conduct a question and answer session.

Corie: To ask a question you will need to press star one on your telephone and wait for your name to be announced.

Operator: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first call comes from Susan Maklari of Goldman Sachs. Susan, your line is open. Hey, good morning everyone. This is Charles Perron, in for Susan.

Corie: Draw. Your question. Please press star one again, please standby, while we compile the Q&A roster.

Corie: Yeah.

Speaker Change: Our first call comes from Susan Macquarie Goldman Sachs. Susan Your line is open.

Charles Perron: Thanks for taking my question. Hey, good morning, Charles. Maybe first, talking about EWP, obviously it's encouraging to see that the market dynamic is favorable for the volume outlook for the coming quarters. But when you think about iJoyst specifically, you've seen OSV prices rising significantly through the first quarter, obviously being quite elevated right now. You talk about pricing erosion on EWP moderating, which is encouraging, but how should we think about the input cost and basically the margin dynamics, especially for iJoyst in the near term considering those dynamics together? Yeah, sure, Charles.

Speaker Change: Hey, Good morning, everyone. This is Charles Perron for Susan Thanks for taking my question.

Charles Perron: Hey, good morning Carol.

Charles Perron: Maybe first talking about AWP, obviously, it's encouraging to see that the market dynamic is favorable for for the volume outlook for the coming quarters, but when you think about <unk>, specifically, you've seen obviously always be prices.

Charles Perron: Rising significantly through the first quarter, obviously being quite elevated right now you talked about pricing erosion on AWP moderating, which is encouraging but how should we think about the input costs and particularly the margin dynamic, especially for I joist in the near term considering those both dynamics together.

Nathan R. Jorgensen: So yeah, we feel really good about our iJoyst position in the marketplace in general. And then specific to your question around cost. Yeah, OSB and WebStock are a meaningful input cost for iJoyst. As we've spoken before, though, we do have, https://www.buffalo.edu.au Okay, yeah, that's helpful.

Speaker Change: Yeah sure Charles So yeah, we feel really good about our position in the marketplace in general and then specific to your question around cost of.

Speaker Change: OSB and in web stock gives them meaningful input cost.

Speaker Change: Our I joist as we've spoken before though we do have a kind of a 13 week average pricing mechanism at which we procure our OSB and so.

Charles Perron: We kind of lagged on the way up and we also lagged on the way down and.

Charles Perron: And I feel good about our visit our ability to kind of continue to manage our cost base across the WP in general.

Charles Perron: And then sticking to that point about the commodity price moving, when you think about BMD specifically, how do you approach holding inventories in this environment where you see this price weakness? And what is your ability, to some extent, to predict that margin for the segment, let's say, above the historical average of 3 to 4, as you've mentioned in the past? Yeah, so let me kick it off here and then we'll see if, So, you know, we're certainly at a bit of a discovery period here.

Speaker Change: Okay. Yeah. That's helpful. And then just sticking to that point about the commodity price moving.

Speaker Change: When you think about BMD, specifically, how do you approach a holding inventories in this environment, where you see this price weakness.

Speaker Change: And what is your ability to some extent to predict that that margin.

Speaker Change: For the segment, let's say above the historical average.

Speaker Change: Forward that you've mentioned in the past.

Speaker Change: Yes, So let me kick it off here and then we'll see.

Speaker Change: Jeff our name on it.

Jeffrey Robert Strom: Provide some input here.

Jeffrey Robert Strom: No.

Jeff Trump: <unk>.

Jeffrey Robert Strom: We're certainly in a bit of a discovery period here on OSB has fallen significantly as still a very high levels compared to history as Youll note, but its fallen quite sharply. So we're still in a bit of a discovery mode. There plywood has been stable, but yet it's shown.

Jeffrey Robert Strom: OSB has fallen significantly, still at very high levels compared to history, as you'll note. But it's fallen quite sharply, so we're still in a bit of a discovery mode there. Plywood has been stable, but it's showing a little bit of weakness as well.

Jeffrey Robert Strom: A little bit of weakness as well just I think it's kind of correlating with OSB in that regard a little more in the south than in the west So our ability to manage and mitigate.

Jeffrey Robert Strom: I think it's kind of correlating with OSB in that regard, a little more in the south than in the west. So our ability to manage and mitigate risk, we're going to be in the marketplace every day. We have really good visibility of what's on the ground, what our cost position is, and we're not going to fall in love with our inventory.

Jeff Trump: You know, we're going to be in the marketplace. Every day, we have really good visibility of what's on the ground what our cost position is and we are we're going to we're not going to fall in love with her inventory, we're going to move it we're going to turn it and we'll keep continue to work down our work down our position that again, we're gonna be there for our customers anything you'd add Jeff yeah.

Jeffrey Robert Strom: We're going to move it. We're going to turn it, and we'll continue to work down our positions. And again, we're going to be there for our customers. Anything you'd add, Jeff?

Jeffrey Robert Strom: Yeah, I would just add that overall, we saw this coming, and we worked really, really hard to lighten our position before it hit. So obviously, you'd always like to have a little bit less when print comes down as big as it is, but we're in pretty well-positioned for it. Okay, that's a very helpful color there. And maybe one last one.

Jeffrey Robert Strom: I would just add that you know.

Jeffrey Robert Strom: Overall, we were we saw this coming and we worked really really hard to lighten our position before it hit so.

Jeffrey Robert Strom: Obviously, you'd always like to have a little bit less when spring comes on Wednesday.

Jeffrey Robert Strom: We're pretty well positioned for it.

Charles Perron: On the balance sheet, you guys repurchased some stock this quarter, which was encouraging to see considering your leverage. You know, when you think about capital allocation going forward, is this something that we should expect more going forward? Or should we think about dividends still remaining your favorite way of distributing capital? Yeah, no. I guess I would say it this way, Charles.

Jeffrey Robert Strom: Okay. That's very helpful color, there and maybe one last one.

Speaker Change: The balance sheet you guys.

Speaker Change: Repurchase some stock this quarter, which was encouraging to see considering your leverage.

Speaker Change: You know when you think about capital allocation going forward is this something that we should expect more going forward or should we think about the dividend. The remaining your favorite way of distributing capital to shareholders.

Speaker Change: Yeah, No I guess I would say it this way Charles So we're committed to our approach we're very committed to our expanded capital program.

Nathan R. Jorgensen: So we're committed to our approach. We are very committed to our expanded capital program. You know, I'd reiterate that we do expect to provide additional shareholder returns, assuming there's no meaningful M&A that surfaces. And then our playbook includes both share repurchases and special dividends, but it wouldn't be appropriate in this forum to really communicate more than that in terms of timing and sizing and how that plays out exactly. But our expectation is that we will be returning additional capital to shareholders absent M&A in the balance sheet. Okay, thank you for your time.

Speaker Change: You know I'd reiterate that we do expect to.

Speaker Change: I'll provide additional shareholder returns assuming there is no meaningful M&A that surfaces and then our playbook.

Jeffrey Robert Strom: Includes both share repurchases and special dividends, but it wouldn't be appropriate at this forum to really communicate more than that in terms of timing and sizing and how that plays out exactly but our expectation is we will we will be returning additional capital to shareholders absent M&A and the balance of the year.

Speaker Change: Okay. Thank you for the time guys.

Charles Perron: Thanks, Charles. Thank you very much. One moment for our next question. Our next question comes from the line of Mike Roxland at Truist. Mike, your line is open.

Speaker Change: Thanks Charles.

Speaker Change: Thank you very much one moment for our next question.

Jeffrey Robert Strom: Our next question comes from the line of Mike <unk> at <unk>.

Mike: Mike Joanne is open.

Michael Andrew Roxland: Thank you, Nate, Kelly, Jeff, and Chris for taking my questions. Just wanted to follow up on the last one. Jeff, you mentioned that you sort of saw this commodity price decline coming. So you really, you worked really hard to lighten your positions.

Mike: Thank you Kelly, Jeff and Chris for taking my questions.

Mike: Just wanted to follow up on the last one Jeff you mentioned that you sort of saw this commodity price decline coming so you really worked really hard to lighten your physicians.

Jeffrey Robert Strom: Can you comment, you said you could comment, like where the backlogs stand or order books stand on OSB, lumber, and plywood relative to normal? I would say that on the lumber side, you can get what you need relatively quickly, without any issues. And OSB, I'll tell you, during the run-up, it was very, very difficult to get.

Mike: Can you comment if you can comment like what backlog stand.

Mike: It looks down OSB lumber plywood relative to normal.

Jeffrey Robert Strom: I would say that on the on the lumber side, you can get what you need relatively quickly.

Mike: Without any issues and OSB I'll tell you during the run up it was very very difficult to get.

Mike: And now it.

Mike: There is definitely more available and people are looking for a home for it.

Jeffrey Robert Strom: And now there's definitely more available, and people are looking for a home for it. Gotcha. But in terms of your own inventory levels and how much you have in stock relative to, let's say, where a normalized level of inventory would be for, let's say, OSB and lumber, are you at that normalized level? Did you take it down below that level, given the fact that you had some foresight that the turn was coming? No. We're actually in really good shape. There's been no real reason to take any kind of position on the lumber or studs.

Speaker Change: Got it but in terms of your own inventory levels and how much you havent stock relative to let's say, we're in normal level normalized level of inventory would be for let's say it was being lumber are you don't.

Mike: Liberalized level, you take it down below.

Mike: You had some foresight that the turn was coming.

Jeffrey Robert Strom: And so we say we're going to have it in stock and be ready, and we are. So I think we're in a really good position there. On plywood, I think we have plenty. We're in a good spot there. And OSB, which definitely had a big run and was tough to get, and you could tell it was slowing down a little bit.

Mike: No.

Mike: We have really good shape theres been no real reason to take any kind of position on the lumber studs.

Mike: And so we say we're going to have in stock and be ready and we do so I think we're in really good position there on plywood I think were we.

Mike: We have plenty of where we're in a good spot there in OSB.

Mike: Which definitely had a big run on stuff we get.

Jeffrey Robert Strom: We really did work hard. So overall, I'd say we're kind of right where we should be, and it's kind of a normal level. Hey, Mike. It's Nate.

Mike: Could tell it was slowing down a little but we really did work hard. So overall I'd say, we're kind of right, where we should be and it's kind of a normal level.

Nathan R. Jorgensen: Maybe just to add to Jeff's comments is that in these kind of environments where, you know, commodities have come off, and obviously, OSB is the most recent example, there's obviously hesitancy in the marketplace. And I think our customers and suppliers, as well, look to us as a bit of a safe harbor. And so they're going to go short, they're going to, you know, they're going to be buying more heavily out of the warehouse, maybe instead of rail cars and trucks, it will go to trucks and units.

Speaker Change: Hey, Mike maybe just to add to Jeff's comments.

Mike: And these kind of environments, where commodities have come off and obviously OSB is the most recent example.

Speaker Change: Obviously, it hasnt been seen in the marketplace and I think our customers and suppliers as well look to us as a bit of a safe harbor and so theyre going to go short, they're going to they're going to be buying more heavily out of warehouse, maybe set of railcars and trucks. It goes to trucks and units and again, we're really well supported to what deliver on that so it's important that we remain in stock and weak.

Speaker Change: Provide that important service and value when our customers are in need of it and today it represents that opportunity.

Nathan R. Jorgensen: And again, we're really well supported to deliver on that. So it's important that we remain in stock, and we can provide, you know, that important service and value when our customers are in need of it. And today represents that opportunity. Thank you. That's a great call.

Speaker Change: Got it. Thank you that's great color and then just one quick follow up on BMD.

Michael Andrew Roxland: And then just one quick follow-up on BMD, you guys have done a terrific job shifting your mix to general line and EWP while minimizing commodity. Given the volatility in commodities we're currently seeing and we have seen in the past, I mean, is there a certain percent of commodity that you're ultimately targeting? Is it going to be 30% of BMD to make 25%? And over what time frame are you looking to achieve that?

Speaker Change: You guys put a terrific job shifting your mix to general alignment AWP, while minimizing commodity.

Speaker Change: Given the volatility in commodities, we're currently seeing and we have seen in the past I mean was there sort of percent of commodity that you ultimately targeting because it can be 30% to BMD make 25% and over what time frame do you are you looking to achieve that.

Kelly E. Hibbs: Yeah, good question, Mike. So, currently, in the first quarter, we were, I guess, right around 37% of the mix. Obviously, price can influence the ultimate how big that piece of the sales pie is. But, you know, I think, at the end of the day, I think we would still probably be in the mid, mid to low 30s when we fully execute our strategy.

Speaker Change: Yes. Good question, Mike So, yes, I mean currently in the first quarter, we were I guess right around 37% of the mix.

Speaker Change: Obviously priced and influence the ultimate how big that piece of the sales pie is.

Speaker Change: I think at the end of the day I think we would still probably be in the b and the mid mid to low <unk> when we fully execute our strategy, but we're not but we as we've said many times, we're not exiting commodity.

Speaker Change: Good at it we like it and return on invested capital is really good.

Kelly E. Hibbs: But we're not, but we've, as we've said many times, we're not exiting commodity, we were good at it, we like it, and return on the investment capital is, And I'm just gonna add to that, that we absolutely like the commodity business. The last few weeks of print, haven't been fun. But if that share is going to go down a little bit, it's just because of the growth in the other categories.

Speaker Change: I'm, just going to add to that that we absolutely the commodity business in the last few weeks of Brent Hasnt.

Speaker Change: It hasnt been fun, but if that share is going to go down a little but it's just because of the growth in the other categories, but the commodity business and the good news is our customers rely on us and we're gonna start right in there with it.

Kelly E. Hibbs: But the commodity business is good for us, our customers rely on us, and we're going to stay right in there with it. Yeah, and yeah, and I guess I would just follow up: we have a really good, really good commodity sales team, and great awareness of our data. And I, you know, I look forward to kind of seeing how they guide us through this, this near-term, this near-term period where we're working. Got it. One last question. I'll turn it over to you.

Speaker Change: Yeah, and I guess I would just follow and we Havent really good.

Speaker Change: Really good commodity sales team great awareness of our data and I look forward to kind of see and how they how they navigate us through this this near term this near term period, we're working through.

Michael Andrew Roxland: Kelly, you mentioned that your EWP volume growth this quarter exceeded the single-family start increases. Given the 80-85 EWP correlation to single-family, where do those additional volumes head, especially given the weakness in multifamily? Yeah, so our volumes were heavy to single-family, Mike. I guess I didn't quite follow the balance of that question. Can you give me an example?

Speaker Change: Got it one last question at this time I'll turn it over.

Speaker Change: Kelly, you mentioned that Youre AWP volume growth.

Kelly: This quarter exceeded the single family start increases.

Speaker Change: Given the 88% to 85.

Kelly: EWC correlation to single family, where do those additional volumes had especially given the weakness in multifamily.

Kelly: Yeah. So our volumes were heavy heavy to single, Mike I guess I didn't quite follow the balance of that question can you give me examples.

Kelly E. Hibbs: Sure, no problem. I mean, you said your EWP volumes exceeded the amount of the single family start increases. So I guess what I'm getting at is, given the fact that you have 80% to 85% of your EWP going towards single family, what other categories did you see growth in that absorbed some of your EWP volume? Yeah, I mean, I can't point to specifically. This is a bit anecdotal

Mike: Sure no problem.

Speaker Change: So you said youre AWP volumes exceeded the amount that youre seeing.

Speaker Change: Single family start increases.

Speaker Change: And what I'm getting at is given the fact that you have 80% to 85% of AWP goes towards single family.

Mike: The other category did you see growth in that absorbs some of your AWP volume.

Mike: Yeah.

Mike: <unk> pointed specifically this is a bit anecdotal for sure, but I feel really good about our ability to capture share.

Kelly E. Hibbs: But I feel really good about our ability to capture share, given our good job on the manufacturing side and then also having the benefit of having a leading national distributor, which I think shows up well and helps us capture share. Got it. Thank you very much and good luck in 2Q.

Mike: Given our given the nice job on the manufacturing side, and then also having the benefit of having a.

Mike: A leading national distributor I think shows up well and helps us capture share.

Speaker Change: Got it thank you very much and good luck in <unk>.

Speaker Change: Thank you thanks, Mike.

Speaker Change: One moment for our next question.

Michael Andrew Roxland: Thank you. One moment for our next question. Our next question comes from George Staphos of Bank of America Securities. George, your line is open. Hey guys, this is actually Lucas Hudson on behalf of George Staphos.

Speaker Change: Our next question comes from George Staphos of Bank of America Securities. George Your line is open.

Lucas Hudson: He's currently traveling right now, so first and foremost, thanks for the details. My first question is, what is your outlook for repair and remodel? And is there more momentum for do-yourself projects or pro contractors? And what are the implications for BMD and wood? Hey, Lucas. It's Nate.

Mike: Hey, guys. This is actually Lucas Hudson on for George Staphos. He is currently traveling right now.

Lucas Hudson: So first of all thanks for the details. My first question is what is your outlook for repair and remodel and is there more momentum and do yourself projects or pro contractor and what are the implications for BMD and wood.

Lucas Hudson: Hey, Lukas its Nate maybe just.

Nathan R. Jorgensen: Maybe just I think the theme, as we kind of described in our opening remarks, is that repair and remodel have come off a bit, but it's still historically kind of above where trends typically are. I would say that the pro side of repair and remodel still feels good and pretty steady, maybe relative to the weekend, the over-the-shoulder crowd. So I think the overall view of repair and remodel is good, and I think the backdrop, in terms of that aging housing stock, and homeowner equity, there's still a good foundation there for them to work on. So again, while it's off from what we experienced maybe over the last 12, 24 months, it still represents an important opportunity for our company on a range of products and services. Thank you. That's great, Keller.

Nathan R. Jorgensen: I think the.

Speaker Change: The theme as we kind of described it in our opening remarks is that repair and remodel.

Nathan R. Jorgensen: Come off a bit, but it's still historically kind of above where transcript typically are.

Nathan R. Jorgensen: I'd say that the pro side of repair and remodel still skills, good and pretty steady maybe relative to the the weekend the over the shoulder crowd. So I think the overall.

Nathan R. Jorgensen: View of repair and remodel is good and I think the backdrop in terms of that again that aging housing stock home or equity.

Nathan R. Jorgensen: There is still a good foundation there for them to work on so.

Nathan R. Jorgensen: Again, while its off from from what we experienced in maybe over the last 12 to 24 months. It still represents an important opportunity for our company on a range of products and services.

Speaker Change: Thank you that's that's great color.

Lucas Hudson: Just a quick follow-up as well. Was BMD revenue better than initially expected? And if so, what created that positive variance?

Speaker Change: Just a quick follow up as well.

Speaker Change: Was DMD revenue better than initially expected and if so what created that positive variance.

Lucas Hudson: I would say BMD's revenue probably came out pretty consistent with what our expectations were. I think the quarter started slower than we would have anticipated, and it finished very strong in March. Okay, thank you so much. I'll hop back in the queue.

Speaker Change: I would say BMD revenue, probably came out pretty consistent with what our expectations were I think the quarter started slower than we would have anticipated and it finished finished very strong in March.

Speaker Change: Okay. Thank.

Speaker Change: Thank you so much I'll hop back in the queue.

Speaker Change: Thanks, Luca Thank you very much one moment for our next call. Please.

Lucas Hudson: Thank you very much. One moment for our next call. Our next call comes from the line of Ketan Mamtora of BMO. Your line is open. Thank you very much. First question, just following on from that, the trend that you saw in March, has that continued into April as well? Any, you know, any additional color you can provide on that?

Keeton Mature: Our next call comes from the line of Keeton mature.

Keeton Mature: Your line is open.

Keeton Mature: Thank you very much first question just following up on that.

Keeton Mature: The strength that you saw in March.

Keeton Mature: <unk>.

Keeton Mature: E <unk>.

Keeton Mature: Any additional color you can provide on that.

Ketan Mamtora: Yeah, sure, Ketan. So. So, yes, March was very strong, as I alluded to in the prepared comments. However, the sales pace for BMD was off slightly in April compared to March, but still at healthy levels. And then, in terms of on the wood products manufacturing side, feeling good about the momentum in EWP continuing to be solid. Might be a little bit weaker than what we would have anticipated, but it is still solid as we head into May here.

Speaker Change: Yeah sure Keith so.

Ketan Mamtora: Got it, that's helpful. And then, Kelly, when you talked about BMD's daily sales being up 5% sequentially, are there any shipping date differences that we should be mindful of between Q1 and Q2? Yeah, I would have factored those into the math I gave you, Ketan.

Keith: So yes March was very strong as I alluded to in the prepared comments the sales pace for BMD was off slightly.

Kelly E. Hibbs: But yeah, there are 64 workdays in both the first and second quarter. Got it. So if that's the case, that would still imply BMD being down versus last year's second quarter, if I'm just doing my math correctly. Yeah, that's fair.

Keith: In April compared to March, but still at healthy levels.

Keith: Then in terms of Oh on the wood proud of products manufacturing side.

Keith: Feeling feeling good about the momentum in <unk> continues to be solid.

Keeton Mature: Might be might be a little bit weaker than what we would have anticipated, but still is solid as we head into may here.

Speaker Change: Got it that's helpful. And then Kelly when you talked about in BMD daily sales being up 5% sequentially are there any shipping big differences that we should be.

Speaker Change: Mindful off.

Kelly: Between Q1 and Q2.

Kelly: I would've factored those into my into my math I gave you the keys, but yes. There are 64 64 work days in both the first and second quarter.

Speaker Change: Got it.

Kelly: If that's the case, if that would still imply BMD to be down.

Kelly: Yes.

Kelly: Last year's second quarter, if I'm, just doing my math correctly.

Ketan Mamtora: If we maintain the sales pace, the same pace we had in April, that would be true. But we will see how May and June play out as we continue to see seasonally better weather and see what the ultimate activity around housing is. But yes, you have the right question. Got it. And then just one last one from me.

Kelly: Yeah, that's fair if we maintain at the sales pace at the same pace we've had in April.

Kelly: That would be true now.

Kelly: But we will see how may and June plays out is as we continue to see seasonally better weather and see what the ultimate activity pace activity. Even in housing is but yes, you have the right question there.

Ketan Mamtora: On the margin side, you know, we talked about some margin pressure, you know, some price pressure from EWP, OSP going down here recently, Plywood maybe. But then you also have just seasonally sort of volume leverage in Q2. As we think about margins, how would you sort of weigh in those factors as it relates to Q1's 5.6% margin? Yeah, so April margins were healthy. They were good.

Speaker Change: Got it and then just one last one from me on the <unk>.

Speaker Change: Margin side.

Speaker Change: <unk> talked about some margin pressure.

Kelly: Price pressure from AWP OSB going down recently viable maybe but then you also have just sort.

Kelly: Volume leverage in Q2, as we think about margins.

Kelly: How would you sort of been bullish factors as it relates to Q1, five 6% margin.

Kelly E. Hibbs: You know, May is going to be the discovery period here around commodity prices, as we've talked. So we do expect some pressure here in May. And the extent of it will depend on the duration of the weakness we've seen. But fundamentally, it doesn't change. While we might get some pressure here in the second quarter because of the commodity market, we still feel good about the kind of underlying earnings capability of BMD moving forward to be, you know, consistent with what we've been putting up of late. Hey, Ketan, it's Nate.

Speaker Change: Yeah. So so April margins were healthy they were good.

Kelly: You know may is going to be the discovery period here around commodity prices as we've talked so we do expect some some pressure here in may and to the extent of it will depend on the duration of the weakness we've seen but fundamentally it doesn't change when we might get some pressure here in the second quarter because of the commodity market.

Kelly: We still good still feel good about kind of the underlying earnings capability of BMD moving forward to be consistent with what we've been putting up of late.

Nathan R. Jorgensen: Maybe just to add to Kelly's comment is, if you think about a marketplace that maybe has some hesitancy, you know, in terms of both price and demand, again, the dependence on auto warehouse services only increases. So as you think about, you know, how that shows up for BMD, in terms of sales volume and margin performance out of the warehouse, that's a clear tailwind for us as well. So I think we're well set up to do what we need to do at BMD.

Kelly: It's Nate maybe just add to <unk> comment.

Kelly: Comment.

Kelly: As you think about a marketplace that maybe have some hesitancy in terms of.

Kelly: You both on price and demand again, the dependents on auto warehouse services only increases so as you think about how that shows up for BMD in terms of sales volume and margin performance out of warehouse.

Kelly: A clear tailwind for us as well so I think we're well set up to.

Kelly: Do what we need to do in BMD again kind of no matter, what the demand environment as we go through the quarter.

Ketan Mamtora: Again, kind of no matter what the demand environment is as we go through the quarter. And on EWP prices, you talked about sort of... The price erosion moderating, so is it fair to say that after Q2, we are sort of, you know, stable at those Q2 levels, or it's hard to tell at this point?

Kelly: Got it that's helpful. Then uwp prices you talked about.

Kelly: The price erosion moderating so is it fair to say that after Q2, we have started.

Kelly: Arnaud.

Kelly: Stable.

Kelly: Those Q2 levels or the Taco Bell at this point.

Kelly E. Hibbs: Yeah, so where we were going with that comment, Ketan was, Yeah, we just put up sequential declines of about 4%, and we expect that to moderate. So, you know, somewhere between zero and negative four is kind of our current expectation.

Arnaud: Yeah, So where we were going with that comment Eaton was.

Eaton: Yeah, we just put up sequential declines of about 4% and we expect that to moderate so.

Kelly: Somewhere between zero and negative for us kind of that kind of our current expectation.

Kelly E. Hibbs: And beyond that, you would expect it to sort of stabilize or difficult to say at this point. I'd say it's difficult to say it'll be depending upon market market demand, that sort of. Ketan, its name says, you know, I mean, with the EWP, it's, it's, you know, the market supply and demand is really what kind of sets the framework for pricing.

Kelly: And beyond that you would expect it to sort of stabilize out.

Speaker Change: Difficult to say at this point.

Speaker Change: I'd say, it's difficult to say it'll be depending upon market market demand and that sort of environment.

Speaker Change: <unk>.

Speaker Change: Got it.

Speaker Change: As you know what I mean with AWP it's.

Speaker Change: The market supply and demand is really what kind of sets the framework for pricing. So it's.

Nathan R. Jorgensen: So it may have maybe less to do with input costs and more to do with, you know, what the market environment is. So, to Kelly's point, it's hard to see the second half from here, but as long as starts remain stable and steady, you know, I think that that'll be favorable for the EWP pricing environment as well. That's very helpful. I'll jump back in the queue.

Speaker Change: Maybe less to do with input costs more around you know what the market environment is so to Kellys point.

Speaker Change: Hard to see the second half from here, but as long as starts remain stable and steady.

Speaker Change: No I think that'll.

Speaker Change: That'll be favorable for the AWP pricing environment as well.

Speaker Change: Got it that's very helpful I'll jump back in the queue. Thank you.

Ketan Mamtora: Thank you. Thank you. Thank you very much.

Speaker Change: Thanks, Keith Thank you very much one moment for our next question.

Operator: One moment for our next question, and our next question comes from Kurt Yinger of D.A. Davidson.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: And our next question comes from Kurt Yinger of D. A Davidson your line is open.

Kurt Willem Yinger: Kurt, your line is open. Great, thanks, and good morning everyone. I just wanted to start off on kind of the competitive dynamics between iJoyst and open web at this stage. I'm just curious, is it harder than you would have thought, maybe getting some of those builder customers to convert back after some of the availability-driven kind of shifts in usage, and I know it's a complex topic and a lot of different inputs, but at a high level, how would you kind of describe the Hey, Kurt, it's Nate.

Kurt Willem Yinger: Great. Thanks, and good morning, everyone.

Kurt Willem Yinger: Morning, Greg.

Kurt Willem Yinger: I just wanted to start off on kind of competitive dynamics between I joist and open web at this stage.

Kurt Willem Yinger: Just curious is it harder than you would have thought maybe getting some of those builder customers to convert back after some of the availability driven kind of shifts in usage.

Kurt Willem Yinger: I know, it's a complex topic and a lot of different inputs, but at a high level. How would you kind of describe the pricing differential for a builder customer at this stage between the two products and how does that kind of factor in.

Nathan R. Jorgensen: Yeah, I would just say on the EWP or the iJoyce comparison to plated floor trusses that, you know, so it's not a new phenomenon that's obviously been in place for a number of years. And I think there are times when iJoyce systems are preferred relative to plated floor trusses, and vice versa. I think when I look at kind of the competitive dynamic and environment today, I think iJoyce systems set up well against plated floor trusses, both in terms of cost as well as lead times.

Nathan R. Jorgensen: Hey, Curtis Nate Yeah, I would just say on the.

Nathan R. Jorgensen: The AWP or the I joist comparison to play the floor trusses.

Nathan R. Jorgensen: Not a new.

Nathan R. Jorgensen: Phenomena. That's obviously it had been in place for a number of years and I think there are times when I joist systems, our preferred relative to play the floor trusses and vice versa. I think when I look at kind of the competitive dynamic in environment today.

Nathan R. Jorgensen: I think I joists system set up well against plate and floor trusses are both in terms of cost as well as lead times.

Nathan R. Jorgensen: I think the other component, you know, that we've talked about is that when it comes to builders, they are looking to drive cycle time out of the equation. And so when you look at an iJoyce system versus either dimensional lumber or plate floor trusses, typically, the speed on the construction site is superior and allows, again, the builder to drive down cycle time.

Kurt Willem Yinger: I think the other component.

Kurt Willem Yinger: We've talked about is that when it comes to the builders. They are looking to drive cycle time.

Kurt Willem Yinger: Out of the equation and so when you look at an I joist system versus either dimensional lumber played a floor trusses typically the speed on the on.

Kurt Willem Yinger: On the construction side is superior and allows US again, the builder to drive that cycle time, So which is an important part of how they think about value today and going forward. So I think I joist system AWP is well set up to compete against both dimensional lumber and open trusses and again I think that dynamic about how do we have.

Nathan R. Jorgensen: So, which is an important part of how they think about value today and going forward. So, I think the iJoyce system EWP is well set up to compete against both dimensional lumber and open trusses. And again, I think that dynamic about how we add speed and simplicity to the job site continues to be an important part of what the builder is expecting. Got it. Thanks for that, Nathan.

Kurt Willem Yinger: Speed and simplicity to the job site continues to be an important part of what the builders expecting.

Kurt Willem Yinger: And as we think about, you know, builders trying to address affordability challenges, perhaps building smaller homes, taking complexity out, is there any sort of current or medium-term impact you think that has on the EWP business or the relative attractiveness of those products? I mean, obviously, a smaller home potentially has some sort of volume implications, but beyond that, is there anything that kind of jumps to mind in terms of how that impacts your wood products? Yeah, good question.

Speaker Change: Got it thanks for that Nathan.

Kurt Willem Yinger: We think about.

Kurt Willem Yinger: Builders trying to address affordability challenges, perhaps building smaller homes, taking complexity out.

Kurt Willem Yinger: Is there any sort of.

Kurt Willem Yinger: Current or medium term impact do you think that has on kind of uwp business or the relative attractiveness of those products I mean, obviously, a smaller home potentially had some sort of volume implication, but beyond that is there anything that kind of jumps to mind in terms of how that impacts your wood products business.

Nathan R. Jorgensen: I think the, yeah, I think it's your point that if the footprint is smaller, that can obviously have an influence in terms of the amount of EWP or structural materials in general that can be sold. So I think that, you know, that that's in place. And again, the builders are looking to take costs out. I think there are times, Kurt, when the builders have, you know, for them, if they want to look at how they lower costs, sometimes going vertical is the right answer, given the cost of land.

Speaker Change: Yeah. Good question I think the yeah, I think to your point on it if the footprint is smaller.

Speaker Change: That will obviously have a.

Kurt Willem Yinger: Influence in terms of the amount of <unk>.

Kurt Willem Yinger: <unk> or structural materials in general that can be sold.

Kurt Willem Yinger: I think that you know that.

Kurt Willem Yinger: That's in place and to get the builders are looking to take cost out I think there are times Curt that you know when the builders have.

Kurt Willem Yinger: For them, if they want to look at how do they lower cost sometimes going vertical.

Kurt Willem Yinger: Is the right answer given the cost of.

Nathan R. Jorgensen: And so if they go vertical in terms of adding a second story, that creates an opportunity for EWP, obviously, given that second floor construction. So Yeah, so I think, you know, EWP. I think it's going to be an important part of it. But, as we look at the trade-offs. In terms of lower square footage, you know that that'll show up in our EWP as well as the other products and services we distribute as well. Got it. Okay, that's super interesting. Thanks for that. And then I'm just switching gears to BMD.

Kurt Willem Yinger: Land and so if they if they go vertical in terms of adding a second story that creates an opportunity for you to be peak, obviously given that second floor construction. So yes.

Kurt Willem Yinger: So I think <unk> I think it's going to be an important part of it but as we look at the trade offs.

Kurt Willem Yinger: In terms of the lower square footage.

Kurt Willem Yinger: That'll show up in our <unk> as well as the other products and services, we distribute as well.

Kurt Willem Yinger: Kelly, I thought you mentioned kind of lower gross profit dollars on EWP sales within BMD in the quarter, which I guess is a little bit surprising considering the double digit sales increase. So is that just a dynamic where, you know, based on how you're kind of transferring pricing and kind of the bleed in terms of sales prices, there's a little bit of a timing mismatch, maybe pressuring margins, or is there something else driving that? It doesn't have anything to do with transfer pricing or anything like that.

Speaker Change: Got it okay, that's super interesting thanks for that.

Speaker Change: And then just switching gears to BMD Kelly.

Kurt Willem Yinger: Kelly I thought you mentioned kind of lower gross profit dollars.

Kelly: On AWP sales within BMD in the quarter, which I guess is a little bit surprising considering the double digit sales increase so is that just the dynamic where based on how you are kind of transferring pricing and kind of bleed in terms of sales prices. There there is a little bit of a timing mismatch maybe pressuring.

Kelly: Margins or is there something else.

Kelly: Driving that.

Kelly: Yes.

Speaker Change: Not anything to do with transfer pricing anything like that that's all market based is it just it's just a function of the market and as we as we've seen and experienced some of the pricing pressure.

Kelly E. Hibbs: It's all market-based. It's just a function of the market, and as we've seen and experienced some of the pricing pressure, you know, we see some of that in wood products, and then obviously, you see that in distribution.

Kelly: We see some of that in wood products, and then obviously CPUC, you'll see that in distribution as well.

Kurt Willem Yinger: Okay, makes sense. And then, just lastly, Jeff, we've kind of seen five consecutive quarters now where BMD gross margins are right in that 15% zip code outside of, you know, what we've seen in OSB and maybe a little bit of BWP. Is there anything else that you're kind of keeping an eye on that maybe gives you concern that that 15% could have some downward pressure on it? Or are you feeling pretty comfortable with those levels, given the kind of current state of the market? Yeah, Kurt, there's always competition out there. That's one thing I'll say.

Speaker Change: Got it okay makes sense.

Kelly: And then just lastly, I mean, Jeff we kind of seen.

Kelly: Five consecutive quarters, now where BMD gross margins are right in that 15% Zip code.

Kelly: Outside of.

Kelly: What we've seen in OSB, and maybe a little bit of DWP.

Kelly: Is there anything else that you are kind of keeping an eye on that maybe give you concern that 15%.

Kelly: Could have some downward pressure to it or are you feeling pretty comfortable with those levels given kind of the current state of the market.

Speaker Change: Yeah sure.

Speaker Change: As always competition out there was one thing I will say so you have to keep your eye on that and what's going on but yes.

Jeffrey Robert Strom: So you have to keep your eye on that and what's going on. But, you know, if you think about what we've done over the past few years and the growth that we've done in the capacity we've added, that's all about the general line and some of the no work items, which are the higher margin. And so our focus and growth on that is what's been holding it steady. But, you know, there's a little pressure on the millwork side. And there's always competition and everything else. But for where we sit right now, we feel good. Got it. All right. Well, I appreciate all the details, guys.

Speaker Change: If you think about what we've done over the past few years and the growth that we've done and the capacity we've added and that's all about general line and some of the millwork items, which are the higher margin ones and so our focus on growth on that is what's been holding it steady.

Speaker Change: There is a little pressure on the millwork side.

Speaker Change: There's always competition and everything else, but for where we sit right now we feel good.

Speaker Change: Got it alright, well I appreciate all the details guys and good luck here in Q2.

Kurt Willem Yinger: And good luck here in Q2. Thanks. Thank you very much.

Speaker Change: Thanks Kurt.

Operator: One moment for our next question. Our next question comes from Reuben Garner of Benchmark. Reuben, your line is open. Thank you. Good morning, everyone.

Speaker Change: Thank you very much one moment for our next question.

Speaker Change: Our next question comes from Reuben Garner of benchmark Rubin Your line is open.

Reuben Garner: Thank you good morning, everyone.

Reuben Garner: All right, great. Sorry to harp on this, but I think it's pretty critical right now. And I just want to clarify, on the inventory side, I understand you guys become more valuable in these sorts of environments. You're suggesting that your customers maybe go shorter on inventory when there's uncertainty like this and commodity downside. Is that something that has already played out and is done in the first quarter?

Reuben Garner: Alright.

Reuben Garner: Sorry to harp on this but I think it's pretty critical right now and I just want to clarify.

Reuben Garner: On the inventory side I understand you guys become more valuable in this.

Reuben Garner: Is it something that's ongoing and impacted your business in April, and you're expecting it to continue to impact the business? Can you just kind of clarify where we stand on that sort of channel destock? Reuben, I don't know if it's a D stock as much as what, if you can get it and eliminate risk, why wouldn't you just buy exactly what you need when you need it?

Speaker Change: Sort of environment.

Speaker Change: You're suggesting that your customers maybe go shorter on inventory when there's uncertainty like this and commodity downside is that something that has already played out and has done in the first quarter or is it something that.

Speaker Change: Ongoing and impacted your business in April and you're expecting it to continue to impact the business can you just kind of clarify where we stand on that sort of.

Speaker Change: Panel.

Speaker Change: Stop.

Jeffrey Robert Strom: And that's what's happening. So, we're seeing right now, as, for example, on the OSB side, as prices are decelerating, you know, people don't want to step in and buy direct; they want to get what they need to cover it quick. And so our warehouse business, we're seeing right now, is picking back up. Okay.

Speaker Change: I don't know if it's a destock as much as what if you can get it and eliminate risk why wouldn't you just by exactly what you need when you need it and that's what's happening. So we're seeing right now as for example on the OSB side as prices are decelerating.

Speaker Change: Don't want to step in and buy directly they want to get what they need to cover a quick and so our warehouse business. We're seeing right now is picking back up.

Reuben Garner: And then I guess on the General Line side, last time we kind of saw a jump in rates and some uncertainty kick in. The distribution channel, including yourselves, got pretty conservative and destocked in some categories. I guess, how are you thinking about that? It looks like General Line had a pretty strong first quarter. Is it different this time?

Speaker Change: Okay and then.

Speaker Change: I guess.

Speaker Change: On the general line side last time, we kind of saw a jump in rates and some uncertainty kick in the distribution channel, including yourselves got pretty conservative and Destocking some certain categories.

Speaker Change: I guess, how are you thinking about that it looks like general line had a pretty strong first quarter or is it different. This time are there are there trends that are hanging in in some of those areas that are different than the commodity side and arent maybe.

Speaker Change: Sensitive as you as you thought can you just kind of update us on your thoughts there.

Reuben Garner: Are there trends that are hanging in in some of those areas that are different than the commodity side and aren't maybe as rate sensitive as you thought? Can you just kind of update us on your thoughts there? Yeah, on the general line, the one big difference I'd say that we saw this year compared to last was the winter buy and the price increases that were announced on some products before people were hit. Last year, for example, people were hesitant to step in; they just didn't know.

Jeffrey Robert Strom: And this year, there was confidence about what was going to happen this year in the market. And so when those things came along, people jumped in, and they purchased them. So as far as the stocking goes, we don't see that.

Speaker Change: In general the one big difference I would say that we saw this year compared to last well in.

Speaker Change: In the winter buy and the price increases that were announced on some box before people were hit last year. For example people are hesitant to step in and I just didn't know and this year. There was confidence on what was going to happen. This year in the market and so when those things came along people jumped in and they purchase on so as far as Destocking goes we don't see that in fact in some of the winter buys we're starting to see people step back in and buy some.

Speaker Change: More so on the general on has really been pretty stable.

Speaker Change: Okay, Great and then pricing are there certain categories within <unk>.

Speaker Change: DMD outside of the commodity that are facing more pressure than others. It sounds like you had some success.

Speaker Change: Full increases anything going the other direction.

Reuben Garner: In fact, for some of the winter buys, we're starting to see people step back in and buy some more. So the general line has really been pretty stable. Okay, great.

Speaker Change: I think right now I mentioned that earlier, you know theres always some AWP pricing pressure or just the competition.

Reuben Garner: And then pricing, are there certain categories within BMD outside of the commodity that are facing more pressure than others? It sounds like you have some successful increases. Anything going on in the other direction?

Speaker Change: And then the millwork side, there has been a little bit there and a lot of that has been driven by some of the components and things that come in from offshore and just look before he has one of the things like that but those would probably the two biggest areas that we're seeing right now.

Jeffrey Robert Strom: Yeah, I think right now, I mentioned it earlier, you know, there's always some EWP pricing pressure, just for competition. And, and then the millwork side, there's been a little bit there. And a lot of that has been driven by some of the components and things that come in from offshore and just what the freight has done, and things like that. But those would probably be the two biggest areas that we're, Okay, great. Thanks, guys. Congratulations on a strong quarter and good luck. Thanks.

Speaker Change: Okay, great. Thanks, guys congrats on the strong quarter and good luck.

Speaker Change: Thanks.

Operator: Thank you. One moment for our next question. My backup is Ketan Mamtora from BMO.

Speaker Change: Thank you one moment for our next question.

Ketan Mamtora: Ketan, your line's open. Thank you. Just one quick one, were there any sort of geographic variations what you saw in Q1 or in April in terms of, you know, regions, east versus west? Anything to call out there? Hey Keaton, it's Nate.

Speaker Change: Backup is keeping inventory from BMO. Your line is open.

Speaker Change: Thank you.

BMO: Just one quick one.

Speaker Change: Hello.

Backup: Geography, Mediations, what you saw in Q1 or in April in terms of regions.

Speaker Change: As tourists is vast and anything to call out there.

Nathan R. Jorgensen: I don't, you know, I think it was pretty, I mean, there's always weather-driven events that can kind of shape the first quarter, but I don't think there was anything kind of unique in terms of, you know, strength or weaknesses, you know, from a geographic perspective. I think it was pretty steady and consistent kind of across our franchise. Got it. Okay. And then just one last one on capital allocation.

Nathan: Hey, Ken it's Nathan.

Ken: I think it was pretty I mean, there's always weather driven events that you know that can kind of shape. The first quarter, but I don't think there was anything kind of unique in terms of strength or weaknesses.

Ken: Yeah from a geographic perspective, I think it was pretty steady and consistent kind of across our franchise.

Nathan R. Jorgensen: I'm just curious, sort of, obviously, the balance sheet is very strong. But as you sit here today, you know, there's still uncertainty around, you know, kind of housing, you know, repair and remodeling. So how do you sort of approach it so far as, you know, share repurchases are concerned versus kind of, you know, maintaining even more dry powder? Can you talk about sort of what it can take?

Speaker Change: Got it Okay and then just one last one on capital allocation I'm, just curious sort of you know obviously the balance sheet is very strong.

Ken: But as you sit here today.

Ken: Certainty around kind of housing.

Ken: <unk> modeling so how do you approach it.

Ken: So far as you know share repurchases this concern versus kind of maintaining even more dry powder can you talk about sort of puts and takes there.

Ketan Mamtora: Yeah, sure. I mean, we have the balance sheet to execute on our Hispanic capital program, so I anticipate we're going to charge forward there. Now, to your point, is there uncertainty in the marketplace? In general, yes, but we still have plenty of dry powder to pursue acquisitions if they make sense.

Speaker Change: Yes, sure I mean, we we have the balance sheet.

Ken: Executing on our expanded capital program. So we anticipate we're going to charge forward there.

Ken: Now to your point is there uncertainty in the marketplace in general, yes, but we still have.

Ken: Plenty of dry powder to go pursue acquisitions, if they make sense.

Ken: And if they don't come to fruition again, I do expect will be returning additional capital.

Ken: To shareholders.

Kelly E. Hibbs: And if they don't come to fruition, again, I do expect we'll be returning additional capital to shareholders. We've got, fortunately, we've got plenty of optionality, and we'll be thoughtful and prudent, and again, we'll just kind of stay ahead of the market, stay ahead of M&A, and, you know, we will look to shareholder returns if we think that's the right thing to do as I got it.

Ken: We've got Fortunately, we got plenty of Optionality, and we will be thoughtful and prudent.

Ken: And again, we'll just got to stay abreast of the market stay abreast of M&A and we will we'll look to shareholder returns. If we think that's the right thing to do as the year develops.

Ketan Mamtora: That's very helpful. Good luck. Thank you. Thank you. Thank you. Our next question comes from the line of Susan Maklari of Goldman Sachs. Thank you. Good morning, everyone. It's actually Susan this time.

Speaker Change: Got it that's very helpful. Good luck.

Speaker Change: Thanks, Blake. Thank you standby for our next question.

Ken: Our next question comes from the line of Susan Mcclary of Goldman Sachs.

Ken: Yeah.

Susan Marie Maklari: Thank you good morning, everyone. It's actually Susan this time.

Susan Marie Maklari: I see.

Susan Marie Maklari: I just wanted to quickly ask about the M&A pipeline, and I guess both just in terms of what you're hearing from some of your key partners in BMD today, especially across the general line, as they kind of look out at their businesses over the next couple years and think about growth, and then, as well as just obviously the initiatives you've got and the potential for further acquisition. Yeah, I mean, I guess.

Susan Marie Maklari: Good morning.

Susan Marie Maklari: I just wanted you to do.

Susan: Quickly ask about the M&A pipeline and I guess, both just in terms of what Youre hearing from some of your key partners in BMD today, especially maybe across the general line as they kind of look out at their businesses over the next couple of years and think about growth and then as well as just obviously you know the initiatives you've gone and done and the potential for further acquisition.

Susan Marie Maklari: Yeah.

Speaker Change: Yes, I mean I guess.

Susan Marie Maklari: Certainly at the dealer level, there is still quite a bit of activity there, a much more fragmented marketplace than where we sit in the channel. For us, we will be aware and be acquisitive if it's the right thing to do. But I think our view is for us, it's going to be organic. It's going to be our focus, and it's going to be the main driver of our capital deployment here, at least in the near term, unless something surfaces that we're not working on today. Hey Sue, it's Nate.

Susan Marie Maklari: Certainly.

Susan Marie Maklari: The dealer levels, so quite a bit of activity there.

Susan Marie Maklari: More fragmented marketplace, and where we sit in the channel.

Susan Marie Maklari: For us we will be.

Susan Marie Maklari: Be aware and be acquisitive, if it's the right thing to do but I think my view is.

Susan Marie Maklari: My view is for us it's going to be our organic is going to be our focus and is going to be the main driver of our capital deployment here here at least near term and unless unless something surfaces that are that we're not I'm not working on today.

Kelly E. Hibbs: Yeah, I think to Kelly's point, it's, you know, the M&A always has to be aligned with our strategy and also our values just in terms of who we are and how we think about the marketplace. The other thing we are pretty insistent on is, you know, one plus one has to be greater than two, both in terms of the customers we serve and support as well as the suppliers.

Susan Marie Maklari: Sue it's Nate Yeah, I think this can always pointed.

Susan Marie Maklari: The M&A always has to be aligned with our strategy and also our values just in terms of who we are how do we think about the marketplace. The other thing we're pretty insistent on is one plus one has to be greater than two both in terms of the customers, we serve and support as well as the supplier. So those are really important parts of.

Kelly E. Hibbs: So, you know, those are, you know, really important parts of our equation and how we think about it. And so we'll, we'll continue to look through that lens as opportunities emerge. Okay. All right. That's helpful. And then just one more from me.

Susan Marie Maklari: In our equation and how we think about it and so we'll we'll continue to look through that lens as opportunities emerge.

Susan Marie Maklari: Okay, Alright, that's helpful. And then just one more from me when you think about the commentary that we've heard from the builders this earning season I mean, they're there.

Susan Marie Maklari: You know, when you think about the commentary that we've heard from the builders this earnings season, I mean, they're pretty bullish, and a lot of them have actually raised their expectations for full-year closings, even with the move-in rates that we've seen recently. I guess as you think about some of that coming through to your business, what do you think it could imply in terms of seasonality as we move through the next couple of quarters and just the potential for some continued strength to come through on that new home construction side? Yeah, you're right, Sue.

Susan Marie Maklari: Pretty bullish and in a lot of them have actually taken up their expectations for full year closings, even with the move in rates that we've seen recently I guess as you think about some of that coming through to your business. What do you think it could imply in terms of seasonality as we move through the next couple of quarters and just the potential for some continued strength to come through on that new home construction side.

Nathan R. Jorgensen: And you probably know better than we do about the national builders, they are, they continue to be pretty optimistic, they continue to deploy their balance sheets as necessary to get folks into homes. So they seem to be still, you know, I don't know, on average, kind of mid to high single digits, if you will, in terms of their growth expectations. But then you balance that a little bit with the overall narrative that, you know, in some cases, it feels a little softer in terms of broadly across the marketplace.

Susan Marie Maklari: Yeah, you're right Sue and you probably know better than us around the national builders. They are they continue to be pretty optimistic they continue to deploy their balance sheet as necessary.

Susan Marie Maklari: To get folks into homes so they.

Susan Marie Maklari: They seem to be still you know I don't know.

Susan Marie Maklari: On average kind of mid to high single digits. If you will in terms of their growth expectations.

Susan Marie Maklari: But then you balance that a little bit with the overall narrative that.

Susan Marie Maklari: In some cases, it feels a little softer in terms of broadly across the marketplace and so there is there is kind of.

Nathan R. Jorgensen: And so there's kind of, you know, we're kind of in an interesting period here where there are kind of multiple data points and data sets and commentary, and so it's a little interesting to kind of sort out how we, how the market shapes for us here in the next quarter. Yeah, thanks, too.

Susan Marie Maklari: We're kind of at an interesting period here, where there's there's kind of multiple data points and datasets and commentary.

Susan Marie Maklari: So it's a little interesting just kind of sort out how we how the market shapes for us here in the next quarter or two.

Nathan R. Jorgensen: The other thing I would comment on is, I think the large production builders, national builders, public builders, I think they're really well positioned, as Kelly described, just given the strength of their balance sheets, they've got great clarity on the marketplace, the customers they serve, and I suspect they'll continue to grow share relative to their position as compared to others in the marketplace. So I think they're, you know, they're obviously an important part of the marketplace today, and we think that that'll continue to grow over time, just given their strength from a financial perspective, as well as their great understanding of the marketplace and what their customers need and expect. Yeah, okay, all right. Yes, no, thank you both for the color and good luck with everything.

Susan Marie Maklari: I think the other thing I would comment on I think the.

Susan Marie Maklari:

Susan Marie Maklari: <unk> production builders National builders public builders, I think they're really well positioned it as Kelly described just given the strength of their balance sheet that got great clarity.

Susan Marie Maklari: On the marketplace the customers they serve and I suspect they'll continue to grow share relative to their position as compared to others in the marketplace. So I think they're there.

Susan Marie Maklari: They're obviously, an important part of the marketplace today, and we think that that will continue to grow over time, just given their strength in both from a financial perspective, as well as their great understanding of the marketplace and what their customers need and expect.

Speaker Change: Yes, Okay, Alright, yes, no. Thank you both for the color and good luck with everything.

Speaker Change: Thanks Sue.

Susan Marie Maklari: Thanks, Sue. Thank you very much. This concludes the question and answer session. I would now like to turn it back to Nate Jorgensen for closing remarks. Great, thank you. We appreciate everyone joining us this morning for our update and thank you for your continued interest and support in Boise Cascade. Please be safe and be well.

Speaker Change: Right.

Speaker Change: Thank you very much. This concludes the question and answer session I would now like to turn it back to Nate Jorgensen for closing remarks.

Nathan R. Jorgensen: Great. Thank you. We appreciate everyone joining us this morning for our update and thank you for your continued interest and support in Boise Cascade, please be safe and be well.

Nathan R. Jorgensen: Thanks. Thank you for your participation in today's conference. This does conclude the program and you may now disconnect. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Thanks for watching!

Speaker Change: Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.

Operator: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Music Music Music Music, ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Good day. My name is Corey and I will be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade's first quarter, 2024. Please, I'll put that censor in a list morning.

Nathan R. Jorgensen: [music].

Nathan R. Jorgensen: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Right.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Thanks.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Great.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star-one-one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star-one-one again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce you to Chris Forrey, Vice President, Finance, and Investor Relations, Boise Cascade. Mr. Forrey, you may begin your conference. Thank you, Corey, and good morning, everyone.

Cory: My name is Cory and I will be your conference facilitator today at this time I would like to welcome everyone to Boise Cascade's first quarter good morning.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Listen only mode.

Cory: After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.

Cory: Automated message advising that your hand as rates to withdraw your question. Please press star one again, please be advised that today's conference is being recorded. It is now my pleasure to introduce you to Chris <unk>, Vice President Finance and Investor Relations Boise Cascade. Mr. <unk> you may begin your conference.

I would like to welcome you to Boise Cascade's first quarter 2024 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO, Kelly Hibbs, our CFO and treasurer, Troy Little, head of our wood products operations, and Jeff Strom, 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.

Chris: Thank you Cory and good morning, everyone I would like to welcome you to Boise Cascade's first quarter 2024 earnings call and business update joining me on today's call are Nate Jorgensen, our CEO Kelly <unk>, our CFO and Treasurer, Troy Little head of our wood products operations and Jeff <unk> head of our building materials distribution operations turning to slide two.

Chris: 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.

Also, please note that the appendix includes reconciliations from our Gap Net Income to EBITDA and Adjusted EBITDA and Segment Income to Segment EBITDA. I will now turn the call over to Nathan. Thanks, Chris. Good morning, everyone.

Speaker Change: Now turn the call over to Nate.

Thank you for joining us for our earnings call today. I'm on slide number three. Total U.S. housing starts only increased 1%, but single-family starts increased 27% compared to the prior year quarter.

Nathan R. Jorgensen: Thanks, Chris Good morning, everyone. Thank you for joining us for our earnings call today I'm on slide number three.

Nathan R. Jorgensen: Total U S housing starts only increased 1% Harbor single family starts increased 27% compared to the prior year quarter. Our consolidated first quarter sales of $1 6 billion were up 7% from first quarter 2023, our.

Our consolidated first quarter sales of $1.6 billion were up 7% from the first quarter of 2023. Our net income was $104.1 million, or $2.61 per share, compared to a net income of $96.7 million, or $2.43 per share, in the year-ago quarter. Both of our businesses delivered strong financial results during the quarter, which were influenced by seasonal factors and the relative strength of new single-family housing starts. In addition, our expanded capital spending program is progressing consistent with our expectations as we provide meaningful returns to our shareholders through share price gains, dividends, and share repurchases.

Nathan R. Jorgensen: Our net income was $104 1 million or $2 61 per share compared to net income of $96 7 million or $2 43 per share in the year ago quarter.

Nathan R. Jorgensen: Both of our businesses delivered strong financial results during the quarter, which were influenced by seasonal factors and the relative strength of new single family housing starts in.

Nathan R. Jorgensen: In addition, our expanded capital spending program is progressing consistent with our expectations as we are providing meaningful returns to our shareholders through share price gains dividends and share repurchases I want to thank our associates across the company continued to execute our strategies that position us to serve and support each of our stakeholders Kelly will now walk through our segment financial results.

I want to thank our associates across the company who continue to execute our strategies that position us to serve and support each of our stakeholders. Kelly will now walk through our segment financial results and provide an update on the capital allocation in more detail, after which I'll provide our outlook before we take your questions.

Nathan R. Jorgensen: <unk> and provide an update on our capital allocation in more detail after which I'll provide our outlook before we take your questions.

Thank you, Nate. Good morning, everyone. With product sales in the first quarter, including sales for our distribution segment, we're 468.9 million, compared to 437.4 million in the first quarter. With products, we reported segment EBITDA of $95.6 million, up from EBITDA of $93.2 million reported a year ago. The increase in segment EBIT is due primarily to higher EWP sales volumes and higher plywood sales prices. These increases were offset partially by lower EWP prices and higher wood fiber costs. BMD sales in the quarter were $1.5 billion, up 9% from the first quarter of 2023. BMD reported Segment EBITDA of $83.6 million in the first quarter, compared to $76.8 million in the prior year.

Kelly: Thank you Nate and good morning, everyone wood product sales in the first quarter, including sales to our distribution segment were $468 9 million compared to $437 4 million in first quarter 2023 Wood products reported segment EBITDA of $95 6 million up from EBITDA of $93 2 million reported in the year ago.

Kelly: Quarter the.

Kelly: The increase in segment EBITDA was due primarily to higher AWP sales volumes and higher plywood sales prices. These increases were offset partially by lower AWP prices and higher wood fiber costs.

Nathan R. Jorgensen: BMD sales in the quarter for $1 5 billion up 9% from first quarter 2023, BMD reported segment EBITDA of $83 6 million in first quarter compared to segment EBITDA of $76 8 million in the prior year quarter.

The increase in segment EBITDA was driven by a gross margin increase of $22.9 million resulting primarily from higher sales volumes and improved margins on general line and commodity products. The Gross Margin Improvement was offset partially by increased selling and distribution, and depreciation and amortization expense of $16.5 million and $4 million, respectively. We expect total company depreciation and amortization in 2024 to be approximately $140,000. In addition, our anticipated effective tax rate remains at 25%.

Nathan R. Jorgensen: The increase in segment EBITDA was driven by gross margin increase of $22 9 million, resulting primarily from higher sales volumes and improved margins on general line and commodity products. The gross margin improvement was offset partially by increased selling and distribution expenses and depreciation and amortization expense of $16 5 million and 4 million.

Nathan R. Jorgensen: Dollars respectively.

Nathan R. Jorgensen: We expect total company depreciation and amortization in 2024 to be approximately $140 million. In addition, our anticipated effective tax rate remains at 25%.

Turning to slide 5, on a year-over-year and sequential basis, first quarter volumes for LVL were up 31% and 16%, respectively, and IJOIS volumes over the same comparative periods were up by 46% and 5%. Our EWP volume growth exceeded the underlying single-family housing start increases for both comparative periods. The potential pricing for both IJOYS and LVL was down 4% due to continued pricing pressure in the market. Looking forward to the second quarter, production builders have maintained optimism in spite of increasing mortgage rates, and we expect our AWP volumes to increase sequentially.

Nathan R. Jorgensen: Turning to slide five on a year over year and sequential basis first quarter volumes for LVL were up 31% and 16%, respectively and I joist volumes over the same comparative periods were up by 46% and 5% our AWP volume growth exceeded the underlying single family housing start increases for <unk>.

Nathan R. Jorgensen: Both comparative periods.

Nathan R. Jorgensen: Commercial pricing for both I joist, and LVL was down 4% due to continued pricing pressure in the market.

Nathan R. Jorgensen: Looking forward to the second quarter production builders have maintained optimism in spite of increasing mortgage rates and we expect our AWP volumes to increase sequentially on pricing, we expect sequential price erosion for moderate during the quarter.

On pricing, we expect sequential price erosion to moderate during the quarter. Turning to slide six, our first quarter plywood sales volume in wood products was 372 million feet compared to 406 million feet in first quarter 2020. As expected, plywood volumes decreased during the current quarter as we shifted a higher proportion of our internally produced veneer into EWP production given improved demand for EWP. The $378 per thousand average plywood net sales price in the first quarter was up 3% from the first quarter of 2023 and up 1% sequentially.

Nathan R. Jorgensen: Turning to slide six our first quarter plywood sales volume in wood products was 372 million feet compared to 406 million fee in first quarter 2023 as expected plywood volumes decreased during the current quarter as we shifted a higher proportion of our internally produced veneer into AWP production given improve.

Nathan R. Jorgensen: Demand for AWP.

Nathan R. Jorgensen: 378 per thousand average plywood net sales price in the first quarter was up 3% from first quarter 2023, and up 1% sequentially. Thus far in the second quarter 2020 for plywood price realizations are consistent with our first quarter average. However, we expect downward pricing pressure as we move through the second quarter.

Thus far in the second quarter of 2024, plywood price realizations are consistent with our first quarter average. However, we expect downward pricing pressure as we move through the second quarter given uncertainty in the, Moving to slides seven and eight. VMD's first quarter sales for $1.5 billion, up 9% from first quarter 2023, driven by sales volume increases of 12% offset partially by sales price decreases of 1%, My product line commodity sales increased 1%, general line product sales increased 16%, and sales of EWP increased 12%. Gross margin dollars increased $22.9 million when compared to the same quarter last year.

Nathan R. Jorgensen: Given uncertainty in the panel markets.

Nathan R. Jorgensen: Moving to slide seven and eight Bmd's first quarter sales were $1 5 billion up 9% from first quarter 2023, driven by sales volume increases of 12% offset partially by sales price decreases of 3% byproduct line commodity sales increased 1% General line product sales increased 16% and <unk>.

Nathan R. Jorgensen: EWC increased 12% plus.

Nathan R. Jorgensen: Gross margin dollars increased $22 9 million when compared to the same quarter last year as higher margin dollars on general line and commodity products were offset partially by lower margin dollars generated on AWP. In addition, bmd's overall gross margin percentage was 15, 1% up 30 basis points from the 14, 8% reported.

Higher margin dollars on general line and commodity products were offset partially by lower margin dollars generated on EWP. In addition, B&B's overall gross margin percentage was 15.1%, up 30 basis points from the 14.8% reported in the first quarter. The MD's EBITDA margin was 5.6% for the quarter, flat with the year-ago quarter and up 20 basis points.

Nathan R. Jorgensen: In the first quarter of 2023, and down 10 basis points sequentially.

Nathan R. Jorgensen: Bmd's EBITDA margin was five 6% for the quarter flat with the year ago quarter, and up 20 basis points sequentially.

B&B sales pace thus far in the second quarter of 2024 has moderated slightly from the strong levels experienced in March, but it's still approximately 5% above the first quarter daily sales average. However, commodity markets have created hesitancy in the marketplace currently. We anticipate our daily sales pace will strengthen as we move through the quarter, given a healthy single-family environment and occasionally better weather. Second quarter EBITDA margins will be sensitive to the ultimate sales pace for the period and the trajectory of product prices.

Nathan R. Jorgensen: <unk> sales pace, thus far in second quarter 2024, as moderated slightly from the strong levels experienced in March but is still approximately 5% above first quarter daily sales averages, although commodity markets have created hesitancy in the marketplace. Currently we anticipate our daily sales pace will strengthen as we move through the quarter given it.

Nathan R. Jorgensen: Healthy single family environment, and seasonally better weather.

Nathan R. Jorgensen: Second quarter, EBITDA margins will be sensitive to the ultimate sales pace for the period and the trajectory of product pricing.

Moving to slide 9. This slide shows the weak pricing environment for lumber over the last five quarters. As such, recent capacity reductions in certain geographies have been announced, and there is speculation of additional production curtailments if weak pricing persists. Moving to slide 10. The late first quarter increase in composite panel prices was driven by OSB due to strength in single family starts and supply limitations.

Nathan R. Jorgensen: Moving to slide nine.

Nathan R. Jorgensen: This slide shows the weak pricing environment for lumber over the last five quarters as such recent capacity reductions in certain geographies have been announced and there are speculation of additional production curtailments, if weak pricing persists.

Nathan R. Jorgensen: Turning to slide 10, select first quarter increase in composite panel prices was driven by OSB due to strength in single family starts and supply limitations as we enter the second quarter sharp price declines in OSB and created cautious buyer behavior across panel markets in general.

As we enter the second quarter, sharp price declines in OSB have created cautious buyer behavior across panel markets in general. For our distribution business, periods of uncertainty create both risk and opportunity. Despite the uncertainty in commodity markets currently, we will maintain our longstanding approach to having inventory on hand to support our customer base.

Nathan R. Jorgensen: Our distribution business periods of uncertainty trade, both risk and opportunity. Despite the uncertainty in commodity markets. Currently we will maintain our long standing approach to having inventory on hand to support our customer base.

Speaker Change: I'm now on slide 11.

We had capital expenditures of $34 million in the first quarter, with $19 million of spending in wood products and $15 million of spending in BMD. Our capital spending range for 2024 remains at $250 to $270 million, with the pace of spending expected to accelerate as we move forward. Speaking of shareholder returns, we paid $11 million in regular dividends to shareholders and completed the repurchase of approximately $206,000 of our common shares for $27 million in the first quarter.

Speaker Change: We had capital expenditures of $34 million in the first quarter with $19 million of spending in wood products and $15 million of spending in BMD are capital spending range for 2024 remains at $250 million to $270 million with the pace of spending to accelerate as we move through the year.

Nathan R. Jorgensen: Speaking to shareholder returns, we paid $11 million and regular dividends to shareholders and completed the repurchase of approximately 206000 of our common shares for $27 million in the first quarter. We have approximately $1 7 million shares still available for repurchase under our share repurchase program. In addition, our board of directors recently approved.

We have approximately 1.7 million shares still available for repurchase under our share repurchase program. In addition, our Board of Directors recently approved a 20-cent per share quarterly dividend for shareholders of record as of June 3, payable June 17.

Nathan R. Jorgensen: <unk> per share quarterly dividend for shareholders of record as of June 3rd payable June 17.

Nathan R. Jorgensen: Sure.

In summary, our balance sheet remains very strong, and we are committed to our balanced approach to capital allocation that includes ongoing investment in our existing asset base, organic growth projects, and returns to our shareholders. Looking forward, unless a meaningful M&A transaction surfaces, we would expect to return additional capital to our shareholders during the balance of 2024, via special dividends or share return, or a combination of the two. I will turn it back over to Nate to discuss our business. Thanks, Kelly. I'm on slide number 12.

Nathan R. Jorgensen: In summary, our balance sheet remains very strong and we are committed to our balanced approach to capital allocation that includes ongoing investment in our existing asset base organic growth projects and returns to our shareholders looking forward unless a meaningful M&A transaction surfaces, we would expect to return additional capital to our shareholders during the balance.

Nathan R. Jorgensen: It's a 2024 via special dividends or share repurchases or a combination of the two I will turn it back over to Nate to discuss our business outlook.

Current industry forecasts for 2024 US housing starts are generally consistent with actual housing starts of $1.42 million in 2023 as reported by the US Census Bureau. However, home affordability remains a challenge for many consumers due to the cost of housing combined with elevated mortgage rates. However, with low unemployment and an undersupply of existing housing stock available for sale, new residential construction is expected to remain an important source of supply for homes. Recent pressures on multifamily starts are expected to continue due to the increased capital cost for developers combined with cooling, rents, and elevated supply.

Nathan R. Jorgensen: Thanks, Kelly I'm on slide number 12 current industry forecast for 2020 for U S. Housing starts were generally consistent with actual housing starts of 142 million in 2023 as reported by the U S Census Bureau home affordability remains a challenge for many consumers due to the cost of housing combined with elevated mortgage rates, however, with low.

Nathan R. Jorgensen: Unemployment and an under supply of existing housing stock available for sale new residential construction is expected to remain an important source of supply for homebuyers.

Nathan R. Jorgensen: Recent pressures on multifamily starts are expected to continue due to the increased capital cost 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. However, in 2023, year-over-year growth rates and renovation spending moderated due to economic uncertainty and higher powering costs. While home improvement spending is expected to remain healthy compared to history, recent industry forecasts project mid-single-digit declines in 2024.

Nathan R. Jorgensen: 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 in.

Nathan R. Jorgensen: In 2023 year over year growth rates and renovation spending moderated due to economic uncertainty.

Nathan R. Jorgensen: Borrowing costs.

Nathan R. Jorgensen: Our home improvement spending is expected to remain healthy compared to history recent industry forecast project mid single digit declines of 2024, ultimately macro macro environment factors the level of expectations for mortgage rates home affordability home equity levels and other factors are likely influence the near term demand environment for the products, we manufacture and.

Ultimately, macro-environment factors that level expectations for mortgage rates, home affordability, home equity levels, and other factors will likely influence the near-term demand environment for products we manufacture. As Kelly mentioned, we remain well positioned to invest in our existing asset base and organic growth projects in both businesses, as reflected in our robust 2024 capital spending plan. A longer-term view on housing fundamentals remains favorable, supported by demographic trends and under-built housing stock.

Nathan R. Jorgensen: <unk>.

Nathan R. Jorgensen: As Kelly mentioned, we remain well positioned to invest in our existing asset base and organic growth projects in both businesses as reflected in our robust 2024 capital spending plans are longer term view on housing fundamentals remains favorable supported by demographic trends and under built housing stock as such we remain clearly focused on the execution of our strategies.

As such, we remain clearly focused on the execution of our strategies and have great conviction around the investments that continue to grow the company. Thank you for joining us today and for your continued support and interest in Boise Cascade. We would welcome any questions at this time. Corey, would you please open the phone lines?

Nathan R. Jorgensen: And have great conviction around the investments that continue to grow the company.

Speaker Change: Thank you for joining us today and for your continued support and interest in Boise Cascade.

Speaker Change: Welcome any questions at this time Corie would you. Please open the phone lines.

Thank you. At this time, we will now conduct a question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced.

Speaker Change: At this time, we will now conduct conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be.

Speaker Change: Draw. Your question. Please press star one again, please standby while we compile.

To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first call comes from Susan Maklari of Goldman Sachs. Susan, your line is open. Hey, good morning everyone. This is Charles Perron in for Susan.

Speaker Change: Will the Q&A roster.

Speaker Change: Our first call comes from Susan Macquarie Goldman Sachs. Susan Your line is open.

Thanks for taking my question. Hey, good morning, Charles. Maybe first, talking about EWP, obviously it's encouraging to see that the market dynamic is favorable for the volume outlook for the coming quarters. But when you think about iJoyce specifically, you've seen OSV prices rising significantly through the first quarter, obviously being quite elevated right now. You talk about pricing erosion on EWP moderating, which is encouraging, but how should we think about the input cost and basically the margin dynamics, especially for iJoyce in the near term considering those dynamics together? Yeah, sure, Charles.

Speaker Change: Hey, Good morning, everyone. This is Charles Perron for Susan Thanks for taking my question.

Charles Perron: Hey, good morning Carol.

Charles Perron: Maybe first talking about AWP, obviously, it's encouraging to see that the market dynamic is favorable for for the volume outlook for the coming quarters, but when you think about <unk>, specifically, you've seen obviously OSB prices.

Charles Perron: Rising significantly through the first quarter, obviously being quite elevated right now you talked about pricing erosion on AWP moderating, which is encouraging but how should we think about the input cost and particularly the margin dynamic, especially for I joist in the near term considering dose those dynamics together.

So yeah, we feel really good about our iJoyce position in the marketplace in general. And then specific to your question around cost. Yeah, OSB and WebStock are a meaningful input cost for iJoyce. As we've spoken before, though, we do have, either the link in the video description or the link in the video description.

Speaker Change: Yes sure sure. So yes, we feel really good about our position in the marketplace in general and then specifically to your question around cost, yes, OSB and web stock is a meaningful input cost for I joist.

Speaker Change: We've spoken before though we do have.

Speaker Change: And of a 13 week average pricing mechanism at which we procure our OSB and so.

Speaker Change: We kind of lagged on the way up and we also lag on the way down and.

Speaker Change: I feel good about our visit our ability to kind of continue to manage our cost base across CWT in general.

Okay, yeah, that's helpful. And then sticking to that point about the commodity price moving, when you think about BMD specifically, how do you approach holding inventories in this environment where you see this price weakness? And what is your ability, to some extent, to predict that margin for the segment, let's say, above the historical average of 3 to 4, as you've mentioned in the past? Yeah, so let me kick it off here and then we'll see if, So, you know, we, You know, we're certainly at a bit of a discovery period here.

Speaker Change: Okay. Yeah. That's helpful and then sticking to that point about the commodity price moving.

Speaker Change: When do you think about BMD, specifically, how do you approach holding inventories in this environment, where you see this this price weakness.

Speaker Change: And what is your ability to some extent to predict that that margin.

Speaker Change: For the segment, let's say above the historical average of three to four that you've mentioned in the past.

Speaker Change: Yes, so let me kick it kick it off here and then we'll see if Jeff our name on it.

Jeffrey Robert Strom: To provide some input here so.

Jeffrey Robert Strom: <unk>.

Jeffrey Robert Strom: We're certainly in a bit of a discovery period here on OSB has fallen significantly as still a very high levels compared to history as Youll note.

OSB has fallen significantly, still at very high levels compared to history, as you'll note. But it's fallen quite sharply, so we're still in a bit of a discovery mode there. Plywood has been stable, but it's showing a little bit of weakness as well.

Jeffrey Robert Strom: Its fallen quite sharply so we're still in a bit of a discovery mode. There plywood.

Jeffrey Robert Strom: Has been stable, but yet it's.

Jeffrey Robert Strom: Showing a little bit of weakness as well just I think it's kind of correlating with OSB in that regard a little more in the south than in the west So our ability to manage and mitigate.

I think it's kind of correlating with OSB in that regard, a little more in the south than in the west. So our ability to manage and mitigate risk, we're going to be in the marketplace every day. We have really good visibility of what's on the ground, what our cost position is, and we're not going to fall in love with our inventory.

Jeffrey Robert Strom: We're going to be in the marketplace. Every day, we have really good visibility of what's on the ground what our cost position is and we are we're going to we're not going to fall in love with our inventory, we're going to move it we're going to turn it and we'll keep continue to work down our work down our position that again, we're going to be there for our customers anything you would add Jeff yes.

We're going to move it. We're going to turn it, and we'll continue to work down our positions. And again, we're going to be there for our customers. Anything you'd add, Jeff?

Yeah, I would just add that overall, we saw this coming, and we worked really, really hard to lighten our position before it hit. So obviously, you'd always like to have a little bit less when print comes down as big as it is, but we're in pretty well-positioned for it. Okay, that's a very helpful color there. And maybe one last one.

Jeffrey Robert Strom: I would just add that.

Jeffrey Robert Strom: Overall, we saw this coming and we worked really really hard to lighten our position before it hit so.

Jeffrey Robert Strom: Obviously, you'd always like to have a little bit less when spring comes on is big it is.

Jeffrey Robert Strom: We're pretty well positioned for it.

On the balance sheet, you guys repurchased some stock this quarter, which was encouraging to see considering your leverage. You know, when you think about capital allocation going forward, is this something that we should expect more of going forward? Or should we think about dividends still remaining your favorite way of distributing capital to shareholders?

Jeffrey Robert Strom: Okay. That's very helpful color, there and maybe one last one.

Speaker Change: On the balance sheet you guys.

Speaker Change: We purchased some stock this quarter, which was encouraging to see considering your leverage.

Speaker Change: When you think about capital allocation going forward is this something that we should expect more going forward or should we think about the dividend. The remaining your favorite way of distributing capital to shareholders.

Yeah, no, I guess I would say it this way, Charles, so we're committed to our approach. We're very committed to our expanded capital program. You know, I'd reiterate that we do expect to provide additional shareholder returns, assuming there's no meaningful M&A that surfaces. And then our playbook includes both share repurchases and special dividends, but it wouldn't be appropriate in this forum to really communicate more than that in terms of timing and sizing and how that plays out exactly. But our expectation is that we will be returning additional capital to shareholders absent M&A in the balance sheet. Okay, thank you for your time.

Speaker Change #109: Yes, I guess I'd say.

Charles Perron: Charles So were.

Speaker Change: <unk> to our approach, we're very committed to our expanded capital program.

Speaker Change: <unk>.

Jeffrey Robert Strom: I would reiterate that we do expect to.

Charles Perron: I'll provide additional shareholder returns assuming there is no meaningful M&A that surfaces and then our playbook.

Charles Perron: Includes both not share repurchases and special dividends, but it wouldn't be appropriate at this forum to really communicate more than that in terms of timing and sizing and how that plays out exactly but our expectation is we will we will be returning additional capital to shareholders absent M&A and the balance of the year.

Speaker Change: Okay. Thank you for your time guys.

Thanks, Cheryl. Thank you very much. One moment for our next question. Our next question comes from the line of Mike Roxland at Truist. Mike, your line is open.

Speaker Change: Thanks Charles.

Speaker Change: Thank you very much one moment for our next question.

Speaker Change: Our next question comes from the line of Mike <unk>.

Mike: Mike Joanne is open.

Thank you, Nate, Kelly, Jeff, and Chris for taking my questions. Just wanted to follow up on the last one. Jeff, you mentioned that you sort of saw this commodity price decline coming. So you really worked really hard to lighten your positions.

Mike: Yes.

Mike: Thank you Kelly, Jeff and Chris for taking my questions.

Mike: Just wanted to follow up on the last one Jeff you mentioned that you sort of saw this commodity price decline coming. So you really worked really hard to like to lighten. Your physicians can you comment do you think you can comment like what our backlog stand.

Can you comment, you say you can comment, where do backlogs stand or order books stand on OSB, lumber, and plywood relative to normal? I would say that on the lumber side, you can get what you need relatively quickly, without any issues. And OSB, I'll tell you, during the run-up, it was very, very difficult to get.

Mike: Our order books down OSB lumber plywood relative to normal.

Jeffrey Robert Strom: I would say that on the on the lumber side, you can get what you need relatively quickly.

Mike: Without any issues in OSB I'll tell you during the run up it was very very difficult to get.

Mike: And now.

Mike: There's definitely more available and people are looking for a home for it.

And now there's definitely more available, and people are looking for a home for it. Gotcha. But in terms of your own inventory levels and how much you have in stock relative to, let's say, where a normalized level of inventory would be for, let's say, OSB and lumber, are you at that normalized level? Did you take it down below that level, given the fact that you had some foresight that the turn was coming? No, we're actually in really good shape. There's been no real reason to take any kind of position on the lumber or studs.

Speaker Change #118: Got you and in terms of your own inventory levels and how much you havent stock relative to let's say, we're in normal level normalized level of inventory would be for let's say OSB and lumber.

Speaker Change #118: Liberalized level you take it down below given the fact that you had some foresight that the turn was coming.

Mike: No we're actually a really good shape theres been no real reason to take any kind of position on the lumber does.

And so we say we're going to have it in stock and be ready, and we are. So I think we're in a really good position there. On plywood, I think we have plenty. We're in a good spot there. And OSB, which definitely had a big run and was tough to get, and you could tell it was slowing down a little bit.

Mike: And so we say we're going to have in stock and be ready and we do so I think we're in really good position there on plywood I think we're we have plenty when we're in a good spot there in OSB.

Mike: Which definitely had a big run on stuff we get.

Mike: And you could tell it was slowing down a little but we really did work hard. So overall I'd say, we're kind of right, where we should be and it's kind of a normal level.

We really did work hard. So overall, I'd say we're kind of right where we should be, and it's kind of a normal level. Hey, Mike. It's Nate.

Maybe just to add to Jeff's comments is that in these kind of environments where, you know, commodities have come off, and obviously OSB is the most recent example, there's obviously hesitancy in the marketplace. And I think our customers and suppliers, as well, look to us as a bit of a safe harbor. And so they're going to go short, they're going to, you know, they're going to be buying more heavily out of the warehouse, maybe instead of rail cars and trucks, it will go to trucks and units.

Speaker Change: Hey, Mike maybe just to add to Jeff's comments.

Speaker Change #122: These kind of environments, where commodities have come off and obviously OSB is the most recent example.

Speaker Change #106: There is obviously hasnt been seen in the marketplace and I think our customers and suppliers as well look to us as a bit of a safe harbor and so theyre going to go short, they're going to they're going to be buying more heavily out of warehouse, maybe set of railcars and trucks. It's it goes to trucks and units and again, we're really well supported to deliver on that so it's important that we remain in stock and we can provide.

And again, we're really well supported to deliver on that. So it's important that we remain in stock, and we can provide, you know, that important service and value when our customers are in need of it. And today represents that opportunity. Thank you.

Speaker Change: Right.

Speaker Change: That important service and value when our customers are in need of it and today represents that opportunity.

Speaker Change #107: Got it. Thank you that's great color and then just one quick follow up on BMD.

Then just one quick follow-up on BMD, you guys have done a terrific job shifting your mix to general line and EWP while minimizing commodity. Given the volatility in commodities we're currently seeing and we have seen in the past, I mean, is there a certain percent of commodity that you're ultimately targeting? Is it going to be 30% of BMD's mix, 25%? And over what time frame are you looking to achieve that?

Speaker Change #107: You guys put a terrific job shifting your mix to general alignment AWP, while minimizing commodity.

Speaker Change: Given that given the volatility in commodities. We're currently seeing and we have seen in the past I mean was there sort of percent of commodity that you ultimately targeting as it can be 30% of bmd's make 25% and over what timeframe do you are you looking to achieve that.

Yeah, good question, Mike. So, currently, in the first quarter, we were, I guess, right around 37% of the mix. Obviously, price can influence the ultimate how big that piece of the sales pie is. But, you know, I think, at the end of the day, I think we would still probably be in the mid, mid to low 30s when we fully execute our strategy.

Speaker Change: Yes. Good question, Mike. So yes currently in the first quarter, we were I guess right around 37% of the mix, obviously priced and influence the ultimate how big that piece of the sales pie is.

Speaker Change #100: I think at the end of the day I think we would still probably be in the mid mid to low <unk> when we fully execute our strategy, but we're not but we as we've said many times, we're not exiting commodity we were good at it we like it and return on invested capital is really good.

But we're not, but we've, as we've said many times, we're not exiting commodity, we were good at it, we like it, and return on the Mike, I'm just gonna add that we absolutely like the commodity business in the last few weeks of print. It hasn't been fun. But if that share is going to go down a little bit, it's just because of the growth in the other categories But the commodity business is good for us, our customers rely on us, and we're going to stay right in there with it. Yeah, and I guess I would just follow up.

Speaker Change #105: I'm just going to add to that that we absolutely are the commodity business in the last few weeks of Brent Hasnt been fun, but if that share is going to go down a little bit. It's just because of the growth in the other categories, but the commodity business has been good to us our customers rely on us and we're going to start right in there with it.

We have a really good, really good commodity sales team, great awareness of our data, and I, you know, I look forward to kind of seeing how they guide us through this, this near-term, this near-term period where we're working. Got it. One last question. I'll turn it over.

Speaker Change #101: And I guess I would just follow on we haven't really good.

Speaker Change #101: Really good commodity sales team great awareness of our data and I look forward to kind of see and how they how they navigate us through this this near term this near term period, we're working through.

Kelly, you mentioned that your EWP volume growth this quarter exceeded the single-family start increases. Given the 80-85 EWP correlation to single-family, where do those additional volumes head, especially given the weakness in multifamily? Yeah, so our volumes were heavy to single-family, Mike. I guess I didn't quite follow the balance of that question. Can you give me an example?

Speaker Change #102: Got it one last question at this time I'll turn it over.

Speaker Change #102: Kelly, you mentioned that Youre AWP volume growth.

Kelly: This quarter exceeded the single family start increases.

Speaker Change #102: Given the ADP 80 to 85.

Kelly: AWP correlation to single family, where do those additional volumes had especially given the weakness in multifamily.

Kelly: Yes.

Kelly: Volumes were heavy heavy to single, Mike I guess I didn't quite follow the balance of that question can you hear me now.

Sure, sure, no problem. I mean, you said your EWP volumes exceeded the amount of the single family start increases. So I guess what I'm getting at is, given the fact that you have 80% to 85% of your EWP going towards single family, what other categories did you see growth in that absorbed some of your EWP volume? Yeah, I mean, I can't point to specifically. This is a bit anecd

Mike: Sure no problem.

Mike: You said Youre uwp volumes exceeded the amount that you are still on the single family start increases I.

Mike: I guess I'm, what I'm getting at is given the fact that you have 85.

Mike: 5% of AWP goes towards single family.

Mike: Other categories did you see growth in that absorbed some of your AWP volume.

Mike: Yes.

Mike: <unk> pointed specifically this is a bit anecdotal for sure, but I feel really good about our ability to capture share.

But I feel really good about our ability to capture share, given our good job on the manufacturing side and then also having the benefit of having a leading national distributor, which I think shows up well and helps us capture share. Got it. Thank you very much and good luck in 2Q.

Kelly: Given our.

Kelly: Given the nice job on the manufacturing side, and then also having the benefit of having.

Kelly: A leading national distributor I think shows up well and helps us capture share.

Speaker Change #111: Got it thank you very much and good luck into Q.

Speaker Change: Thank you thanks, Mike.

Speaker Change #137: One moment for our next question.

Speaker Change: Okay.

Thank you. One moment for our next question. Our next question comes from George Staphos of Bank of America Securities. George, your line is open. Hey guys, this is actually Lucas Hudson on behalf of George Staphos.

Speaker Change: Our next question comes from George Staphos of Bank of America Securities. George Your line is open.

He's currently traveling right now, so first and foremost, thanks for the details. My first question is, what is your outlook for repair and remodel? And is there more momentum for do-it-yourself projects or pro contractors? And what are the implications for BMD and wood? Hey, Lucas, it's Nate.

Speaker Change: Hey, guys. This is actually Lucas Hudson on for George Staphos is currently traveling right now.

Lucas Hudson: So first of all thanks for the details. My first question is what is your outlook for repair and remodel and is there more momentum and do it yourself projects or pro contractor and what are the implications for BMD and wood.

Speaker Change: Hey, Lukas its Nate maybe just.

Maybe just I think the theme, as we kind of described in our opening remarks, is that repair and remodel have come off a bit, but it's still historically kind of above where trends typically are. I would say that the pro side of repair and remodel still feels good and pretty steady, maybe relative to the weekend, the over-the-shoulder crowd. So I think the overall view of repair and remodel is good, and I think the backdrop in terms of that, again, that aging housing stock, and homeowner equity, there's still a good foundation there for them to work on.

Nathan R. Jorgensen: I think the.

Nathan R. Jorgensen: The theme as we kind of described in our opening remarks is that repair and remodel.

Nathan R. Jorgensen: It has come off a bit, but it's still historically kind of above where transcript typically are I would say that the pro side of repair and remodel still feels good.

Nathan R. Jorgensen: Pretty steady maybe relative to the the weekend the over to the shoulder crowd. So I think the overall.

Nathan R. Jorgensen: View of repair and remodel is good and I think the backdrop in terms of that again that aging housing stock homeowner equity.

Nathan R. Jorgensen: Still good.

Nathan R. Jorgensen: Good foundation, there for them to work on so yes.

So again, while it's off from what we experienced maybe over the last 12, 24 months, it still represents, I think, an important opportunity for our company on a range of products and services. Thank you. That's a great color.

Nathan R. Jorgensen: So again, while it's off from from what we experienced in maybe over the last 12 to 24 months, it's still represents.

Nathan R. Jorgensen: Important opportunity for our company on a range of products and services.

Just a quick follow-up as well. Was DMD revenue better than initially expected? And if so, what created that positive variance?

Speaker Change #108: Okay. Thank you that's that's great color.

Speaker Change #138: Just a quick follow up as well.

Speaker Change #108: Was DMD revenue better than initially expected and if so what created that positive variance.

I would say BMD's revenue probably came out pretty consistent with what our expectations were. I think the quarter started slower than we would have anticipated, and it finished very strong, in my opinion. Okay, thank you so much. I'll hop back in the queue.

Speaker Change: I would say Bmd's revenue probably came out very consistent with what our expectations were I think the quarter started slower than we would have anticipated and it finished finished very strong in March.

Speaker Change: Okay. Thank you so much I'll hop back in the queue.

Thank you very much. One moment for our next call. Our next call comes from the line of Ketan Mamtora of BMO. Your line is open. Thank you very much. First question, just following on from that, this trend that you saw in March, has that continued into April as well? Any, you know, any additional color you can provide on that?

Speaker Change #120: Thanks, Luca Thank you very much one moment for our next call. Please.

Keaton Mature: Our next call comes from the line of Keaton mature.

Keaton Mature: BMO Your line is open.

Keaton Mature: Thank you very much first question just following up on that.

Keaton: The strength that you saw in March has that continued.

Keaton Mature: <unk> been any.

Keaton Mature: Any additional color you can provide.

Keaton: Matt.

Yeah, sure, Ketan. So, yes, March was very strong, as I alluded to in the prepared comments. The sales pace for B&B was off slightly in April compared to March, but still at healthy levels.

Matt: Yeah sure Keith so.

Matt: So yes March was very strong as I alluded to in the prepared comments the sales pace for BMD was off slightly.

Matt: In April compared to March.

Keaton: Still at healthy levels, and then in terms of.

And then, on the wood products manufacturing side, feeling good about the momentum in EWP continuing to be solid. It might be a little bit weaker than what we would have anticipated, but it is still solid as we head into May. Got it, that's helpful. And then, you know, Kelly, when you talked about in BMD about daily sales being up 5% sequentially, are there any shipping date differences that we should be mindful of between Q1 and Q2? Yeah, I would have factored those into the math I gave you, Ketan. But yeah, there are 64 workdays in both the first and second quarter.

Keaton: On the wood products manufacturing side.

Keaton: Phil and feeling good about the momentum in <unk> continues to be solid.

Keaton: It might be might be a little bit weaker than what we would have anticipated, but still is solid as we head into may here.

Keaton: Yes.

Got it. So if that's the case, that would still imply BMD being down versus last year's second quarter, if I'm just doing my math correctly. Yeah, that's fair.

Speaker Change #119: Got it that's helpful. And then Kelly when you talked about in BMD daily sales being up 5% sequentially are there any shipping big differences that we should be minor.

Keaton: Mindful of all.

Kelly: Between Q1 and Q2.

Kelly: Yes, I would have factored those into mine into my math I gave you a keen but yes. There are 64 64 work days in both the first and second quarter.

Keaton: Got it.

Keaton: If thats the case that would still imply BMD to be down.

Keaton: Yes.

Keaton: Last year's second quarter, if I'm doing my math correctly.

If we maintain the sales pace, the same pace we had in April, that would be true. But we will see how May and June play out as we continue to see seasonally better weather and see what the ultimate activity around housing is. But yes, you have the right question. Got it, and then just one last one from me.

Keaton: Yes, that's fair if we maintain at the sales pace at the same pace we've had in April.

Keaton: That would be true now.

Keaton: But we will see how may and June plays out is as we continue to see seasonally better weather and see what the ultimate activity pace activity. Even in housing is but yes, you have the right question there.

Speaker Change #123: Got it and then just one last one from me on the margin side.

On the margin side, we talked about some margin pressure, some price pressure from EWP, OSP going down here recently, Plywood maybe, but then you also have just seasonally sort of volume leverage in Q2. As we think about margins, how would you sort of weigh in those factors as it relates to Q1's 5.6% margin? Yeah, so April margins were healthy. They were good.

Speaker Change #123: <unk> talked about some margin pressure.

Speaker Change #123: Price pressure from AWP OSB going down here recently viral maybe but then you also have just seasonally sort of volume leverage in Q2, as we think about margins.

Speaker Change #123: How would you sort of factors.

Speaker Change #123: As it relates to Q1, five 6% margin.

You know, May is going to be the discovery period here around commodity prices, as we've talked. So we do expect some pressure here in May, and the extent of it will depend on the duration of the weakness we've seen. But fundamentally, it doesn't change. While we might get some pressure here in the second quarter because of the commodity market, we still feel good about the kind of underlying earnings capability of BMD moving forward to be, you know, consistent with what we've been putting up of late. Hey, Ketan, it's Nate.

Keaton: Yes, so the April margins were healthy they were good.

Keaton: May is going to be the discovery period here around commodity prices as we've talked so we do expect some some pressure here in may and to the extent of it will depend on the duration of the weakness we've seen but fundamentally it doesn't change what we might get some pressure here in the second quarter because of the commodity.

Keaton: We still good still feel good about kind of the.

Keaton: The underlying earnings capability of E&E moving forward to be consistent with what we've been putting up of late Hey, Keith maybe just add to <unk> comment is as.

Maybe just to add to Kelly's comment is, if you think about a marketplace that maybe has some hesitancy, you know, in terms of both price and demand, again, the dependence on auto warehouse services only increases. So as you think about, you know, how that shows up for BMD in terms of sales volume and margin performance out of the warehouse, that's a clear tailwind for us as well. So I think we're well set up to, you know, do what we need to do in BMD, again, kind of no matter what the demand environment is as we go through the quarter. That's helpful.

Keith: As you think about our marketplace that maybe has some hesitancy in terms of.

Keith: You both on price and demand again, the dependents on auto warehouse services only increases so as you think about how that shows up for BMD in terms of sales volume and margin performance out of warehouse.

Keaton: A clear tailwind for us as well so I think we're well set up to.

Keaton: Do what we need to do in BMD again kind of no matter, what the demand environment as we go through the quarter.

And on EWP prices, you talked about sort of... The price erosion moderating, so is it fair to say that after Q2, we are sort of, you know, stable at those Q2 levels, or it's hard to tell at this point? Yeah, so where we were going with that comment, Ketan said, Yeah, we just put up sequential declines of about 4%, and we expect that to moderate. So, you know, somewhere between zero and negative four is kind of our current expectation.

Speaker Change #115: Got it Thats helpful.

Speaker Change #115: <unk> prices you talked about.

Speaker Change #115: The price erosion moderating so is it fair to say that after Q2.

Speaker Change #117: I'll start off.

Speaker Change #117: Stable at those Q2 levels or the Taco Bell at this point.

Speaker Change #103: Yes, so where we're going with that comment.

Speaker Change #149: Yes, we just put up.

Speaker Change #103: Fletchall declines of about 4%.

Speaker Change #103: And we expect that to moderate so.

Speaker Change #103: Somewhere between zero and negative for us kind of at the time of our current expectation.

And beyond that, you would expect it to sort of stabilize or be difficult to say at this point. I'd say it's difficult to say it'll be depending upon market market demand, that sort of. I mean, with the EWP, it's, you know, the market supply and demand is really what kind of sets the framework for pricing. So it has maybe less to do with input costs and more to do with, you know, what the market environment is.

Speaker Change #103: And beyond that you would expect it to sort of stabilize out.

Speaker Change #130: Difficult to say at this point.

Speaker Change #103: I'd say, it's difficult to say it'll be depending upon market market demand and that sort of environment.

Speaker Change #103: I mean with AWP.

Speaker Change #103: The market supply and demand is really what kind of sets the framework for pricing. So it's.

Speaker Change #103: Maybe less to do with input costs more around what the market environment is so.

So to Kelly's point, it's hard to see the second, you know, half from here, but as long as starts remain stable and steady, that'll be favorable for the EWP pricing environment as well. That's very helpful. I'll jump back in the queue.

Speaker Change #103: Kelly's point.

Speaker Change #103: Hard to see the second half from here, but as long as starts remained stable and steady.

Speaker Change #103: That will be favorable for the AWP pricing environment as well.

Speaker Change #154: Got it that's very helpful I'll jump back in the queue. Thank you.

Thank you. Thank you very much. One moment for our next question. And our next question comes from Kurt Yinger of D.A. Davidson.

Speaker Change #132: Thanks, Keith Thank you very much one moment for our next question.

Kurt, your line is open. Great, thanks, and good morning everyone. I just wanted to start off on kind of the competitive dynamics between iJoyst and open web at this stage. I'm just curious, is it harder than you would have thought maybe getting some of those builder customers to convert back after some of the availability-driven kind of shifts in usage? And I know it's a complex topic and a lot of different inputs, but at a high level, how would you kind of describe the pricing Hey, Kurt, it's Nate.

Speaker Change #103: And our next question comes from Kurt Yinger of D. A Davidson your line is open.

Kurt Willem Yinger: Great. Thanks, and good morning, everyone. Good.

Kurt Willem Yinger: Morning, Greg.

Kurt Willem Yinger: I just wanted to start off on kind of competitive dynamics between I joist and open web at this stage.

Kurt Willem Yinger: Just curious is it harder than you would have thought maybe getting some of those builder customers to convert back after some of the availability driven kind of shifts in usage.

Speaker Change #155: I know.

Speaker Change #104: Complex topic, and a lot of different inputs, but at a high level, how would you kind of describe the pricing differential for a builder customer at this stage between the two products and how does that kind of factor in.

Yeah, I would just say on the EWP or the IJOYS comparison to plated floor trusses that, you know, so it's not a new phenomenon that's obviously been in place for a number of years. And I think there are times when IJOYS systems are preferred relative to plated floor trusses, and vice versa. I think when I look at the kind of competitive dynamic and environment today, I think IJOYS systems set up well against plated floor trusses, both in terms of cost as well as lead times.

Nathan R. Jorgensen: Hey, Curtis Nate Yeah, I would just say on the.

Nathan R. Jorgensen: The DWP choice comparison to play to floor trusses.

Nathan R. Jorgensen: I had a new <unk>.

Nathan R. Jorgensen: That's obviously it had been in place for a number of years and I think there are times when <unk> systems, our preferred relative to play the floor trusses and vice versa.

Nathan R. Jorgensen: I think when I look at kind of the competitive dynamic in environment today.

Nathan R. Jorgensen: I think I joists systems set up well against play to floor trusses, both in terms of cost as well as lead times.

Nathan R. Jorgensen: The other component that we've talked.

I think the other component, you know, that we've talked about is that when it comes to builders, they are looking to drive cycle time out of the equation. And so when you look at an IJOYS system versus either dimensional lumber or plate floor trusses, typically, the speed on the construction site is superior and allows, again, the builder to drive down cycle time.

Nathan R. Jorgensen: Talk about is that when it comes to the builders. They are looking to drive cycle time.

Nathan R. Jorgensen: Out of the equation and so when you look at an I joist system versus either dimensional lumber played a floor trusses typically the speed on the.

Nathan R. Jorgensen: On the construction side is superior and allows US again, the builder to drive that cycle time, So which is an important part of how they think about value today and going forward. So I think I joist system AWP is well set up to compete against both dimensional lumber and open trusses and again I think that dynamic about how do we.

So, which is an important part of how they think about value today and going forward. So I think IJOYS system EWP is well set up to compete against both dimensional lumber and open trusses. And again, I think that dynamic about how we add speed and simplicity to the job site continues to be an important part of what builders expect. Thanks for that, Nathan. And as we think about, you know, builders trying to address affordability challenges, perhaps building smaller homes, taking complexity out, is there any sort of current or medium-term impact you think that has on the EWP business or the relative attractiveness of those products? I mean, obviously, a smaller home potentially has some sort of volume implications.

Nathan R. Jorgensen: Speed and simplicity to the job site continues to be an important part of what the builders expecting.

Speaker Change #125: Got it thanks for that Nathan and as we think about.

Speaker Change #126: Builders trying to address affordability challenges, perhaps building smaller homes, taking complexity out.

Speaker Change #127: Is there any sort of.

Speaker Change #129: Current or medium term impact do you think that has on on kind of uwp business or the relative attractiveness of those products I mean, obviously, a smaller home potentially had some sort of volume implication, but beyond that is there anything that kind of jumps to mind in terms of how that impacts your wood products business.

But beyond that, is there anything that kind of jumps to mind in terms of how that impacts your wood products? Yeah, good question. I think the, yeah, I think it's your point that if the footprint is smaller, that can obviously have an influence in terms of the amount of EWP or structural materials in general that can be sold. So I think that, you know, that that's in place.

Speaker Change #128: Yeah. Good question I think the yes, I think to your point on if the footprint is smaller.

Speaker Change #128: That will obviously have a.

Speaker Change #128: No influence in terms of the amount of <unk>.

And again, the builders are looking to take costs out. I think there are times, Kurt, when the builders have, you know, for them, if they want to look at how they lower costs, sometimes going vertical is the right answer, given the cost of land.

Speaker Change #128: DWP or structural materials in general that can be sold.

Speaker Change #128: I think that.

Speaker Change #128: That's in place and to get the builders are looking to take cost out I think there are times Curt that when the builders have.

Speaker Change #128: For them, if they want to look at it how do they lower cost sometimes going vertical.

Nathan R. Jorgensen: Is the right answer given the cost of land.

And so if they go vertical in terms of adding a second story, that creates an opportunity for EWP, obviously, given that second floor construction. So yeah, so I think, you know, EWP. I think it's going to be an important part of it. But, but as we look at the trade-offs. In terms of lower square footage, you know that that'll show up in our EWP as well as the other products and services we distribute as well. Got it. Okay, that's super interesting. Thanks for that. And then just switching gears to BMD.

Nathan R. Jorgensen: Land and so if they.

Nathan R. Jorgensen: If they go vertical in terms of adding a second story that creates an opportunity for AWP, obviously, given that second floor construction. So.

Speaker Change #133: Yes, so I think <unk> I think it is going to be an important part of it but as we look at the trade offs.

Nathan R. Jorgensen: In terms of lower square footage.

Nathan R. Jorgensen: That will show up in our <unk> as well as the other products and services will be distributed as well.

Speaker Change #141: Got it okay. That's helpful.

Speaker Change #134: <unk> thanks for that.

Kelly, I thought you mentioned kind of lower gross profit dollars on EWP sales within BMD in the quarter, which I guess is a little bit surprising considering the double-digit sales increase. So is that just a dynamic where, you know, based on how you're kind of transferring pricing and kind of the bleed in terms of sales prices there, there's a little bit of a timing mismatch, maybe pressuring margins? Or is there something else driving that?

Speaker Change #110: And then just switching gears to BMD Kelly.

Speaker Change #110: Kelly I thought you mentioned kind of lower gross profit dollars.

Speaker Change #110: On the AWP sales within BMD in the quarter, which I guess is a little bit surprising considering the double digit sales increase so is that just the dynamic where based on how you are kind of transferring pricing and kind of that bleed in terms of sales prices. There. There is a little bit of a timing mismatch may be pressuring.

Speaker Change #110: Margins or is there something else.

Speaker Change #110: Driving that.

It's not anything to do with transfer pricing or anything like that. It's all market-based. It's just a function of the market, and as we've seen and experienced some of the pricing pressure, you know, we see some of that in wood products, and then obviously you see that in distribution. Okay. Okay, makes sense.

Speaker Change #110: Yes.

Speaker Change #136: Not anything to do with transfer pricing anything like that that's all market based it is.

Speaker Change #110: It's just a function of the market and as we as we've seen and experienced some of the pricing pressure.

Speaker Change #110: We see some of that in wood products and then obviously CPUC you see that in distribution as well.

And then just lastly, Jeff, we've kind of seen five consecutive quarters now where BMD gross margins are right in that 15% zip code. Outside of, you know, what we've seen in OSB and maybe a little bit of BWP, is there anything else that you're kind of keeping an eye on that maybe gives you concern that that 15% could have some downward pressure on it? Or are you feeling pretty comfortable with those levels, given the kind of current state of the market? Yeah, Kurt, there's always competition out there. That's one thing I'll say.

Speaker Change #160: Got it okay makes sense.

Speaker Change #110: And then just lastly, I mean, Jeff.

Speaker Change #110: Jeff we kind of see.

Speaker Change #110: <unk>.

Speaker Change #110: Five consecutive quarters, now where BMD gross margins are right in that 15% Zip code.

Speaker Change #110: Outside of.

Speaker Change #110: What we've seen in OSB, and maybe a little bit of DWP.

Speaker Change #110: Is there anything else that you are kind of keeping an eye on that maybe give you concern that 15%.

Speaker Change #110: Could have some downward pressure to it are you feeling pretty comfortable at those levels given kind of the current state of the market.

Speaker Change #145: Yes sure.

Speaker Change #110: Always competition out there is one thing I'll say, so you have to keep your eye on that and what's going on but if you think about what we've done over the past few years and the growth that we've done and the capacity. We've added Thats all about general line and so on the millwork items, which are the higher margin ones and so our focus on growth on that is what's been holding it steady but.

So you have to keep your eye on that and what's going on. But, you know, if you think about what we've done over the past few years and the growth that we've done and the capacity we've added, that's all about the general line and some of the millwork items, which are higher-margin. And so our focus and growth on that is what's been holding it steady. But, you know, there's a little pressure on the millwork side, and there's always competition and everything else, but for where we sit right now, we feel good. I got it.

Speaker Change #110: There's a little pressure on the millwork side.

Speaker Change #110: And there is always competition and everything else, but for where we sit right now we feel good.

Speaker Change #113: Got it alright, well I appreciate all the details guys and good luck here in Q2.

All right. Well, I appreciate all the details, guys, and good luck here in Q2. Thanks. Thank you very much.

Speaker Change #140: Thanks Kurt.

Speaker Change #161: Thank you very much one moment for our next question.

Speaker Change #161: Our next question comes from Reuben Garner of benchmark Rubin Your line is open.

One moment for our next question. Our next question comes from Reuben Garner of Benchmark. Reuben, your line is open. Thank you. Good morning, everyone.

Reuben Garner: Thank you and good morning, everyone.

All right, great. Sorry to harp on this, but I think it's pretty critical right now. And I just want to clarify on the inventory side. I understand you guys become more valuable in these, You're suggesting that your customers maybe go shorter on inventory when there's uncertainty like this and commodity downside. Is that something that has already played out and is done in the first quarter?

Speaker Change #113: Alright.

Reuben Garner: Sorry to harp on this but I think it's pretty critical right now and I just wanted to clarify on the.

Speaker Change #113: The inventory side I understand you guys become more valuable in these.

Is it something that's ongoing and impacted your business in April, and you're expecting it to continue to impact the business? Can you just kind of clarify where we stand on that sort of channel destock? Reuben, I don't know if it's a D stock as much as what, if you can get it and eliminate risk, why wouldn't you just buy exactly what you need when you need it?

Reuben Garner: Sort of environment.

Speaker Change #113: You're suggesting that your customers maybe go shorter on inventory when there is uncertainty like this and commodity downside is that something that has already played out and has done in the first quarter is it something thats.

Speaker Change #113: Ongoing and impacted your business in April and you're expecting it to continue to impact the business can you just kind of clarify where we stand on that sort of <unk>.

Speaker Change #113: <unk> <unk>.

Speaker Change #113: Stop.

And that's what's happening. So we're seeing right now, as, for example, on the OSB side, as prices are decelerating, you know, people don't want to step in and buy direct; they want to get what they need to cover it quick. And so our warehouse business, we're seeing right now, is picking back up. Okay. And then I guess on the General Line side, last time we kind of saw a jump in rates and some uncertainty kick in. The distribution channel, including yourselves, got pretty conservative and destocked in some categories. I guess, how are you thinking about that? It looks like General Line had a pretty strong first quarter.

Speaker Change #113: I don't know if it's a destock as much as what.

Speaker Change #113: You can get it and eliminate risk why wouldn't you just by exactly what you need when you need it and that's what's happening so we're seeing right now.

Speaker Change #113: For example on the OSB side as prices are decelerating.

Speaker Change #113: People don't want to step in and buy directly they want to get what they need to cover it quick and so our warehouse business. We're seeing right now is picking back up.

Speaker Change #116: Okay and then.

Speaker Change #116: I guess.

Speaker Change #116: On the general line side last time, we kind of saw a jump in rates and some uncertainty kick in the distribution channel, including yourselves got pretty conservative and Destocking some certain categories.

Speaker Change #150: Yes, how are you thinking about that it looks like general line had a pretty strong first quarter is it different. This time are there are there trends that are hanging in in some of those areas that are different than the commodity side and maybe.

Is it different this time? Are there trends that are hanging in some of those areas that are different than the commodity side and aren't maybe as rate sensitive as you thought? Can you just kind of update us on your thoughts there? Yeah, on the general line, the one big difference I'd say that we saw this year compared to last was the winter buy and the price increases that were announced on some products before people were hit.

Speaker Change #150: Rate sensitive as you as you thought can you just kind of update us on your thoughts there.

Last year, for example, people were hesitant to step in; they just didn't know. And this year, there was confidence in what was going to happen in the market. And so when those things came along, people jumped in, and they purchased them.

Speaker Change #150: In general on the one big difference I would say that we saw this year compared to last.

Speaker Change #116: The winter buy and the price increases that were announced on some products before people were last year. For example people are hesitant to step in and I just didn't know and this year. There was confidence on what was going to happen. This year in the market and so when those things came along people jumped in and they purchase on so as far as Destocking goes we don't see that in fact on some of the winter buys we're starting to see people step back in and buy some more.

Speaker Change #116: While the general on has really been pretty stable.

So as far as the stocking goes, we don't see that. In fact, in some of the winter buys, we're starting to see people step back in and buy some more. So the general line has really been pretty stable. Okay, great. And then pricing, are there certain categories within BMD outside of the commodity that are facing more pressure than others?

Speaker Change #116: Okay, Great and then pricing are there certain categories within.

Speaker Change #116: DMD outside of the commodity that are facing more pressure than others. It sounds like you had some successful increases anything going the other direction.

It sounds like you had some successful increases. Anything go in the other direction? Yeah, I think right now, I mentioned it earlier, you know, there's always some EWP pricing pressure just for competition. And, and then on the millwork side, there's been a little bit there. And a lot of that has been driven by some of the components and things that come in from offshore and just what the freight has done, and things like that.

Speaker Change #139: Yes, I think right now I mentioned that earlier.

Speaker Change #139: Always some AWP pricing, perhaps with just the competition.

Speaker Change #116: And then the millwork side, there has been a little bit there and a lot of that has been driven by some of the components and things that come in from offshore.

Speaker Change #116: What <unk> has done and things like that but those would probably the two biggest areas that we're seeing right now.

But those would probably be the two biggest areas that we're, Okay, great. Thanks, guys. Congratulations on the strong quarter and good luck.

Speaker Change #142: Okay, great. Thanks, guys congrats on the strong quarter and good luck.

Speaker Change #116: Thanks.

Thanks. Thank you. One moment for our next question. My backup is Ketan Mamtora from BMO.

Speaker Change #164: Thank you one moment for our next question.

Montara: Backup is keeping montara from BMO Your line is open.

Ketan, your line's open. Thank you. Just one quick one, were there any sort of geographic variations what you saw in Q1 or in April in terms of, you know, regions, east versus west? Anything to call out there? Hey Keaton, it's Nate. I don't, you know, I think it was pretty, I mean, there are always weather-driven events that can kind of shape the first quarter, but I don't think there was anything kind of unique in terms of, you know, strength or weaknesses, you know, from a geographic perspective.

Montara: Thank you.

Montara: Just one quick one.

Montara: Carlo.

Montara: Geography, Mediations, what you saw in Q1 or in April in terms of regions.

Speaker Change #165: To us it's worth anything to call out there.

I think it was pretty steady and consistent kind of across our franchise. Got it, okay. And then just one last one on capital allocation. I'm just curious, sort of, obviously, the balance sheet is very strong, but as you sit here today, you know, there's still uncertainty around, you know, the kind of housing, you know, repair and remodeling. So how do you sort of approach it so far as, you know, sharing purchases is concerned versus kind of, you know, maintaining even more dry powder?

Nathan: Hey, Ken it's Nathan.

Nathan: I think it was pretty.

Nathan: I mean, there is always weather driven events that that can kind of shape. The first quarter, but I don't think there was anything kind of unique in terms of strength or weaknesses.

Montara: From a geographic perspective, I think it was pretty steady and consistent kind of across our franchise.

Speaker Change #157: Got it Okay, and then just one last one on capital allocation.

Speaker Change #143: Just curious.

Speaker Change #143: You can see the balance sheet is very strong.

Speaker Change #143: But as you sit here today, there's still uncertainty around kind of housing.

Speaker Change #143: Okay Bambi modeling so how do you approach it.

Speaker Change #143: So far as share repurchases concern western has kind of been all maintaining even more dry powder can you talk about sort of puts and takes there.

Can you talk about sort of what can take care of it? Yeah, sure. I mean, we have the balance sheet to execute on our Hispanic capital program.

Speaker Change #144: Yes sure.

Speaker Change #124: We have the balance sheet.

Speaker Change #124: Executing on our expanded capital program. So we anticipate we're going to charge forward there.

So I anticipate we're going to charge forward there. Now, to your point, is there uncertainty in the marketplace? In general, yes, but we still have plenty of dry powder to pursue acquisitions if they make sense. And if they don't come to fruition, again, I do expect we'll be returning additional capital to shareholders. We've got, fortunately, we've got plenty of optionality.

Speaker Change #124: To your point is there uncertainty in the marketplace in general, yes, but we still have.

Speaker Change #124: Plenty of dry powder to go pursue acquisitions.

Speaker Change #146: Makes sense.

Speaker Change #146: And if they don't come to fruition again, I do expect will be returning additional capital.

Speaker Change #146: To shareholders.

Speaker Change #146: We've got Fortunately, we got plenty of Optionality, and we'll be thoughtful and prudent.

And we'll be thoughtful and prudent. And again, we'll just kind of stay ahead of the market, stay ahead of M&A, and we will look to shareholder returns if we think that's the right thing to do as the year develops.

Speaker Change #146: And again, we'll just got to stay abreast of the market stay abreast of M&A and we will we will look to shareholder returns, we think thats the right thing to do as the year develops.

That's very helpful. Good luck. Thank you. Thank you. Thank you. Our next question comes from the line of Susan Maklari of Goldman Sachs. Thank you. Good morning, everyone. It's actually Susan this time.

Speaker Change #158: Got it.

Speaker Change #148: Good luck.

Speaker Change #145: Thanks Blake.

Speaker Change #152: Standby for our next question.

Speaker Change #152: Our next question comes from the line of Susan Mcclary of Goldman Sachs.

Speaker Change #152: Yes.

Susan Marie Maklari: Thank you good morning, everyone. It's actually Susan at this time.

Speaker Change #145: Okay.

Good morning. I just wanted to quickly ask about the M&A pipeline, and I guess both just in terms of what you're hearing from some of your key partners in BMD today, especially across the general line, as they kind of look out at their businesses over the next couple years and think about growth, and then, as well as just obviously the initiatives you've got and the potential for further acquisition. Yeah, I mean, I guess.

Speaker Change #159: Thanks Sue.

Speaker Change #166: Good morning.

Speaker Change #159: I just wanted you to.

Susan: To quickly ask about the M&A pipeline and I guess, both just in terms of what Youre hearing from some of your key partners in BMD today, especially maybe across the general line as they kind of look out at their businesses over the next couple of years and think about growth and then as well as just obviously the initiatives you've got and the potential for further acquisitions.

Susan: <unk>.

Speaker Change #153: Yes, I mean I guess.

Certainly at the dealer level, there is still quite a bit of activity there, a much more fragmented marketplace than where we sit in the channel. For us, we will be aware and be inquisitive if it's the right thing to do, but I think, my view is that for us, it's going to be organic. It's going to be our focus, and it's going to be the main driver of our capital deployment here, at least in the near term, unless something surfaces that we're not working on today. Hey, Sue, it's Nate.

Speaker Change #153: Certainly the <unk>.

Speaker Change #124: <unk> levels, so quite a bit of activity there much more fragmented marketplace and where we sit in the channel.

Speaker Change #124: For us we will.

Speaker Change #124: And be acquisitive, if it's the right thing to do but I think.

Speaker Change #124: My view is <unk>.

Speaker Change #124: My view is for us it's going to be our organic is going to be our focus and is going to be the main driver of our capital deployment here here at least near term unless unless something surfaces that that.

Speaker Change #124: So we're not working on today.

Yeah, I think to Kelly's point, it's, you know, the M&A always has to be aligned with our strategy and also our values, just in terms of who we are and how we think about the marketplace. The other thing we're pretty insistent on is, you know, one plus one has to be greater than two, both in terms of the customers we serve and support as well as the suppliers.

Speaker Change #151: Yes, I think thats to Kelly's point it's.

Speaker Change #167: Yes, the M&A always has to be aligned with our strategy and also our values just in terms of who we are how do we think about the marketplace. The other thing we're pretty insistent on is one plus one has to be greater than two both in terms of the customers, we serve and support as well as the supplier. So those are really important parts of.

So, you know, those are, you know, really important parts of our equation and how we think about it. And so we'll, we'll continue to look through that lens as opportunities emerge. Okay. All right. That's helpful. And then just one more from me.

Speaker Change #167: In our equation and how we think about it and so we'll continue to look through that lens.

Speaker Change #151: Opportunities emerge.

Speaker Change #131: Okay, Alright, that's helpful. And then just one more from me when you think about the commentary that we've heard from the builders. This earning season I mean, they're they're pretty bullish on and a lot of them have actually taken up their expectations for full year closings, even with the move in rates that we've seen recently is as you think about some of that coming through to your business. What do you think it could imply in terms of.

You know, when you think about the commentary that we've heard from the builders this earnings season, I mean, they're pretty bullish, and a lot of them have actually raised their expectations for full-year closings, even with the move-in rates that we've seen recently. I guess as you think about some of that coming through to your business, what do you think it could imply in terms of seasonality as we move through the next couple of quarters and just the potential for some continued strength to come through on that new home construction side?

Speaker Change #131: His analogy as we move through the next couple of quarters and just the potential for some continued strength to come through on that new home construction side.

Yeah, you're right, Sue. And you probably know better than we do about the national builders, they are, they continue to be pretty optimistic, they continue to deploy their balance sheets as necessary to get folks into homes. So they seem to be still, you know, I don't know, on average, kind of mid to high single digits, if you will, in terms of their growth expectations. But then you balance that a little bit with the overall narrative that, you know, in some cases, it feels a little softer in terms of broadly across the marketplace.

Speaker Change #131: Yes, you are right.

Speaker Change #131: Sue and Brian know better than us around the national builders. They are they continue to be pretty optimistic they continue to deploy their balance sheet as necessary.

Speaker Change #131: To get folks into homes.

Speaker Change #131: They seem to be still.

Speaker Change #131: I don't know on average kind of mid to high single digits. If you will in terms of their growth expectations.

Speaker Change #131: But then you balance that a little bit with the overall narrative.

Speaker Change #131: And in some cases, it feels a little softer in terms of broadly across the marketplace and so there is there is kind of where.

And so there's kind of, you know, we're kind of in an interesting period here where there are kind of multiple data points and data sets and commentary. And so it's a little interesting to kind of sort out how we, how the market shapes for us here in the next quarter. Yeah, thanks, too. The other thing I would comment on is, I think the large production builders, national builders, public builders, I think they're really well positioned, as Kelly described, just given the strength of their balance sheets, they've got great clarity on the marketplace, the customers they serve, and I suspect they'll continue to grow share relative to their position as compared to others in the marketplace.

Speaker Change #131: We're kind of in an interesting period here, where there is there is kind of multiple data points and datasets and commentary.

Speaker Change #131: It's a little interesting just kind of sort out how we how the market shapes for us here in the next quarter or two yes.

Speaker Change #135: Yes, I think the other thing I would comment on I think.

Speaker Change #135: Yes.

Speaker Change #135: The large production builders national builders public builders, I think they're really well positioned as Kelly described just given the strength of our balance sheet that got great clarity.

Speaker Change #135: On the marketplace the customers they serve and I suspect they'll continue to grow share relative to their position as compared to others in the marketplace. So I think there yes. They are.

So I think they're, you know, they're obviously an important part of the marketplace today, and we think that that'll continue to grow over time, just given their strength from a financial perspective, as well as their great understanding of the marketplace and what their customers need and expect.

Speaker Change #135: They're obviously, an important part of the marketplace today, and we think that that will continue to grow over time, just given their strength in both from a financial perspective, as well as their great understanding of the marketplace and what their customers need and expect.

Yeah, okay, all right. Yes, no. Thank you both for the color and good luck with everything. Thanks, Sue. Thank you very much. This concludes the question and answer session. I would now like to turn it back to Nate Jorgensen for closing remarks. Great, thank you. We appreciate everyone joining us this morning for our update, and thank you for your continued interest and support in Boise Cascade. Please be safe and be well. Thanks. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Speaker Change #156: Yes, Okay, Alright, yes, no. Thank you both for the color and good luck with everything.

Speaker Change #162: Thank you.

Speaker Change #135: Yes.

Speaker Change #135: Thank you very much. This concludes the question and answer session I would now like to turn it back to Nate Jorgensen for closing remarks.

Nathan R. Jorgensen: Great. Thank you. We appreciate everyone joining us this morning for our update and thank you for your continued interest and support in Boise Cascade, please be safe and be well.

Speaker Change #163: Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.