Q1 2025 Boise Cascade Co Earnings Call

Rivka: Good morning. My name is Riftka and I'll be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade's first quarter 2025 earnings conference call.

Speaker Change: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. 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, Rivka, and good morning, everyone.

Speaker Change: I'd like to welcome you to Boise Cascade's first quarter of 2025 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO , Jeff Strum, our COO, Kelly Hibbs, our CFO , Troy Littlehead of our Wood Products Operations, and Joe Barney Head of our Building Materials Distribution Operations.

Turning the slide to...

Speaker Change: This call will contain forward-looking statements. Please review the warning statements in our press release on the presentation slides and in our file ends of the SEC regarding the risks associated with these forward-looking statements.

Speaker Change: Also, please note that the appendix includes reconciliations from our Gapnet income to EBITDA and adjusted EBITDA and segment income to segment EBITDA. I will now turn the call over to Nate.

Nate Jorgensen: Thanks, Chris. Good morning, everyone. Thank you for joining us for Ernie's call today. I'm on slide number three [inaudible]

Nate Jorgensen: Total U.S. housing starts and single family housing starts decreased 2% and 6% respectively compared to the prior year quarter Our consolidated first quarter sales of 1.5 billion were down 7% from first quarter of 2024 the end of the year quarter sales of 1.5 billion were down 7% from first quarter of the year quarter sales of 1.5 billion were down

Nate Jorgensen: Our net income was $40.3 million or $0.6 per share, compared to net income of $104.1 million or $2.61 per share in the year ago quarter.

Nate Jorgensen: Our team delivered solid to resolve during the quarter when considering environment influence by constrained demand, uncertain trade policies and difficult weather Home, home buyer affordability challenges continue to affect demand and we were compounded by increasing economic uncertainty that has led us to lower consumer and builder confidence. George Staphos, Susan Maklari,

Nate Jorgensen: Despite the backdrop, our associates across the company remain clearly focused on delivering value to our customer and better partners, which I'm incredibly grateful.

Nate Jorgensen: In addition, the plan outage at our Oakdale Louisiana plywood and veneer facility will negatively impact our first quarter results. The significant modernization products underway there on schedule to be completed at the end of the second quarter and will contribute to the ongoing strength of our EWP franchise.

Nate Jorgensen: Lastly, our clear focus on strategic investments and returns of capital to our shareholders is bolstered by the strength of our balance sheet and our constructive view on long-term demand drivers for residential construction.

Nate Jorgensen: Kelly will now walk through our financial segment results and provide an update on our capital allocation priorities after which I'll provide an outlet before we take your questions. Kelly?

Kelly Hibbs: Thank you Nate and good morning everyone. Wood product sales in the first quarter, including sales to our distribution segment were 415.8 million.

Kelly Hibbs: Down 11% compared to first quarter 2024. What product segment EBITDA was 40.2 million compared to EBITDA of 95.6 million reported in the year of the quarter? The decrease in segment EBITDA was due primarily to lower EWP and plywood sales prices and lower EWP volumes.

Kelly Hibbs: In addition, the scheduled Oakdale outage negatively impacted year-over-year and sequential EBITDA comparisons by approximately 8 million and 7 million respectively.

Kelly Hibbs: And BMD, ourselves in the quarter, will 1.4 billion down, 7% from 1st quarter, 2024. BMD reported segment EBITDAV, 62.8 million in the 1st quarter, compared to segment EBITDAV, 83.6 million in the prior year quarter.

Kelly Hibbs: Turning to slide five. On a year-over-year basis, first-quarter volumes for both LVL and IJoyce were down 3% better than the 6% year-over-year decline in single-family housing starts.

Kelly Hibbs: The pullback in starts stems from a consistent theme we hear from the builder community around moderating the pace of new starts as they continue to sell through higher than anticipated inventory levels.

Kelly Hibbs: As it relates to pricing, sequential results for both LVL and Ijoice were down 3% due to continued pricing pressure created by the constrained demand environment and competition for share.

Kelly Hibbs: Turning to slide six, our first quarter plywood sales volume was 363 million feet compared to 372 million feet in first quarter 2024, primarily driven by the planned outage at our

Kelly Hibbs: The 341 per thousand average plywood net sales price in the first quarter was down 10% on a euro-rear basis and down 3% sequentially [inaudible]

Thank you.

Speaker Change: Moving to slide 7 and 8, VMD's year-over-year first-quarter sales decline of 7% was driven by a 5% decrease in volume and a 2% decrease in price. By product line, commodity sales decrease 7%, general line product sales decrease 3%, and sales of EWP decrease 13%.

Speaker Change: Weather, meaningfully influenced our self-activity in the first quarter, with our January and February daily pace below 21.5 million before March rebounded to exceed 24 million per day.

Speaker Change: As I mentioned earlier, VMD's first quarter gross margin percentage was 14.7% down 40 basis points year-over-year. In particular, gross margin dollars were affected by lower sales volumes and decreased margins on commodity and EWP products.

Bye.

Speaker Change: VMD's EBIDOM margin was 4.5% for the quarter, down from the 5.6% reported in the year ago quarter. A reflection of lower gross margin dollar opportunity from slower sales activity in the associated de-leveraging of our cost base.

Speaker Change: However, it is important to again reference the improved sales velocity in March, which resulted in EBITDA margins for that month, similar to level seen in recent quarters.

Speaker Change: Our BMD team continues to consistently provide high service levels across the broad mix of best-in-class products.

Speaker Change: and as we have spoken to in the past, periods like now where there is near-term demand or price uncertainty, allows us to again demonstrate the value proposition of two-step distribution.

I'm no one's wide known All right.

Speaker Change: As we look forward to the second quarter, EWP volumes will be dependent upon new home sales and the pace at which builders begin new starts. Our EWP order files improve seasonally as we enter the second quarter and we expect EWP volumes to increase by mid to high single digits sequentially.

Speaker Change: On EWP pricing, we expect to experience low single-digit sequential declines as competition for share persists. In plywood, we expect seasonal strengthening and a partial restart at Oakdale to result in mid single-digit sequential volume increases.

On plywood pricing, quarter-to-date realizations.

Speaker Change: Our consistent with our first quarter average. The partial operating status at Oakdale was expected to negatively impact our financial results by roughly 5 million in the second quarter independent of market conditions.

Speaker Change: With regard to BMV sales, April's daily sales pace accelerated from the strengthening we saw in March and was approximately 13% higher than the first quarter 2025 sales pace of 22.3 million per day.

Speaker Change: Our daily sales pace for the balance of the quarter will be dependent upon end market demand and product pricing.

Speaker Change: Lastly, we expect approximately 38 million in total company depreciation and amortization, a 26% effective tax rate, and we have 37.6 million common shares outstanding as of April 30th.

Speaker Change: I'm now on slide 10. We had capital expenditures of 53 million in the first quarter with 31 million of spending in wood products and 22 million of spending in BMD.

Speaker Change: Our capital spending range for 2025 remains between 220 and 240 million. This range includes additional spending on our multi-year investments and support of our EWP production capabilities in the Southeast that we have spoken to previously.

Speaker Change: At Oakdale, impacted machine centers are restarting in phases, and we're excited to have that facility fully operational again by the end of the second quarter. The Thor's BI line is expected to be operational in the first half of 2026.

Speaker Change: In BMD, we have made great progress on our Greenfield Distribution in Hondo, Texas, where construction is roughly 80% complete, and we look forward to its initial start-up by the end of the third

and Kelly Hibbs.

Speaker Change: Speaking to shareholder returns, we paid 10 million in regular dividends during the quarter.

Speaker Change: Our Board of Directors also recently approved a 21 cent per share of quarterly dividend on a common stock

Speaker Change: shareholders of record as of June 2nd will receive payment of this dividend on June 18th.

Speaker Change: Through the first four months of 2025, we were repurchased 71 million of our common stock, 54 million in the first quarter, and another 17 million in April . Today, we have about 1.1 million shares available for repurchase under our current share repurchase program.

Speaker Change: Not unexpectedly, our cash position declined in the first quarter due to seasonal increases in working capital and the previously referenced capital investments and shareholder returns.

Speaker Change: pursuing organic growth opportunities and returning capital to our shareholders. We also maintain the flexibility to execute M&A if opportunities emerge that align with our growth strategy. I will now turn it back over to Nate to share our business outlook and closing remarks.

Nate Jorgensen: Thanks Kelly, I'm on slide number 11. Given the current environment, 2025 in market demand expectations remains difficult to predict, with most forecasts for housing and ranging between flat to mid single digit declines.

Nate Jorgensen: Our first quarter results impacted, meaningfully, by seasonal factors and our purposeful strategic investments are in no way a good indicator of how in market demand and our financial results will play out for the final 2025.

Nate Jorgensen: But expectations for the remainder of the year are unclear as significant macroeconomic uncertainties, and elevated mortgage rates have dampened consumer and home builder confidence.

Nate Jorgensen: However, when we do have great clarity in the strength of our team and our ability to execute at a high level across all market conditions, we remain both steady and agile, we'll be prepared to respond to the economic situation changes and remain resolute in our service to our customer and supplier partners.

Nate Jorgensen: The long-term demand derives for our business remains strong, characterized by under supply and housing units, aging U.S. housing stock and elevated levels of homeowner equity. The structural demand built into the housing market and our robust balance sheet provide us the ability to stay focused on the execution of our strategy and creation of long-term value for our stakeholders.

Speaker Change: Thank you for joining us today and for your continued support and interest in Boise Cascade. We welcome any questions at this time, Rebecca, would you please open the phone lines?

Speaker Change: Thank you. At this time, we'll conduct the question and answer session.

Speaker Change: To ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster.

Speaker Change: Our first question comes from the line of Susan Maklari of Goldman Sachs. Your line is now open.

Thank you. Good morning, everyone.

Morning.

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

Speaker Change: on Inventories in the Channel. Hey Susan, I'll start the conversation and then Joe and Jeff and I was conjuring up and it is needed. I think overall what we're seeing is that that customer is specific to the general line category.

Speaker Change: So that out of warehouse support continues to remain a theme and we're seeing that in terms of both expectations from our suppliers in general line, as well as our customers in terms of how they're thinking about to your point on their working capital positions. [inaudible]

Speaker Change: I think the other thing that we're experiencing with our general line which is really good is their introduction of new products, new skews.

and so that kind of creates...

Speaker Change: A different, maybe narrative in the marketplace where customers may be hesitant to bring some of those newer items in because they just don't know

Speaker Change: Maybe the strength, or the kind of cadence of some of those new products, and so there's dependency on two-step distribution, B&D remains very high.

Speaker Change: So I think overall, we're looked to as probably even more important today just in providing those just-in-time services.

Speaker Change: as our customers are managing their working capital, and again they're working that kind of risk and reward on having inventory levels both on demand and also on price realization. So overall feel steady and consistent, and again two step distribution is really an important part of that equation.

Speaker Change: That's very helpful, Nate. And then, you know, you mentioned that the Oakdale project is progressing. It sounds like that's gone well. You know any thoughts as you bring start to bring that back online relative to the macro environment that we're in and how you're positioned in terms of. [inaudible]

of Rampy Nett Up.

Good morning, Susan, this is Troy.

Speaker Change: Yeah, I mean, when that comes back online, the majority of that veneer goes into our EWP side. So we've been buying veneer on the open market right now to supplement that.

Speaker Change: So when they come back online, that veneer will shift back into the EWP, there'll be some limited plywood volume, they'll come along with that, but we'll just offset what we're buying on the open market and continue, and adjust the production as necessary depending on demand.

Speaker Change: Okay, all right, that's a fun, and then I'm going to squeeze one last one in, which is, you know, it was nice to see the comments on the capital allocation and, you know, potential for the buybacks. Can you talk a bit more how you're thinking about those priorities for this year, just given the world that we're in and anything of note on the M&A pipeline? Yeah, that's a good one.

Kelly Hibbs: Yeah, hi, Susan, this is Kelly. So, nothing of, I'll take your question and reverse order a bit here. Nothing of note on the M&A pipeline, I think, you know, there's still some in bounds.

Kelly Hibbs: But I think, you know, given kind of this near-term uncertainty, I think it's been a little bit quieter in terms of inbound of late, but we're still certainly interested to grow via M&A if it's that right opportunity presents itself. And then in terms of...

Kelly Hibbs: Capital allocation in general, our script and our narrative is very much the same. We've recited about the good amount of organic project work we have ahead of us and we'll, you know, expect to continue to be opportunistically in a thoughtful way in the market regarding shared repurchases. We'll, we'll, we'll, we'll, we'll,

Kelly Hibbs: All right. Well, thank you all for the color and good luck with everything. Thank you, Sue. Thanks, Sue.

One moment for our next question.

George Staphos,

Speaker Change: Our next question comes from the line of Kurt Yinger of DA Davidson. Your line is now open.

Great thanks, and good morning everyone.

Morning. Morning.

Speaker Change: I just wanted to start off on EWP pricing, killing not to pin you down.

Speaker Change: All that much, but I guess directionally would you expect kind of Q2 versus Q1 sequential pressures to be kind of about the same or maybe even lessening a little bit and then

Speaker Change: I hope you could also just talk a little bit more about the competitive dynamics and as you've kind of moved into...

Speaker Change: March and April , and see some seasonal strengthening weather. Any of those pressures may be alleviating a little bit, or if there's kind of a light at the end of the tunnel that you guys are seeing at this stage.

Speaker Change: Yeah, sure, Kurt Alton, Stark, and then maybe Nathan, Troy Atherston.

Speaker Change: I think we were off at roughly 3%, as you can actually hear in the first quarter, you know, we still have May and June to come and it's still a very competitive environment out there, but yeah, I-

Speaker Change: I guess I would guide to a similar percentage to what we experienced in the first quarter in terms of sequential limit.

But again, we'll see how May and June turn out [inaudible]

The Terms of the...

Speaker Change: The kind of underlying activity like I alluded to in my comments, the order file and AWP has did seasonally strengthening pretty nicely here in April . But at the end of the day, we're still...

You know, around the season we adjusted, can you rate on?

Speaker Change: Single Family Housing Starts that's probably less than a million, right? And so we're still, we're still in an environment where there's still competition for share. And so until we see more, more strength in the underlying demand, I think we'll need to see that before we see some levelization on pricing.

Speaker Change: Second quarter generally is, again, more execution focused and less on, you know, kind of sitting up programs and some of the details around that [inaudible]

Speaker Change: Thank you, the other narrative for us is on when it comes to, you know, home builder focus. They continue to stay focused on obviously their input costs, but also cycle times.

Speaker Change: and it is you think about EWP and its ability to compete and win relative to the other options that are out there, whether it's Dimensional Lumber or even play the floor trusses.

Speaker Change: EDBP is certainly an answer in terms of affordability and we both have the open web trust and also creates that kind of that speed and simplicity on the job site, which again remains important for the builder. So those would be maybe two backdrops as we transition into the building season and we'll obviously be watching both of those carefully.

Got it. Okay, that's helpful. Thank you. And then.

Speaker Change: Is that kind of cost differential contemplated and some of the numbers you've talked about related to this outage or would that be separate?

Speaker Change: Yeah, good question, Kurt. So the first part, the 5 million is sequential.

Speaker Change: is expected impact is sequential in terms of the impact of hotel.

Speaker Change: So we expect to continue to see some challenges there as we start up, but in terms of the veneer I spoke to, I think, 8 million and 7 million impacts on EBITDAW from Oakdale.

Okay.

Got it.

Speaker Change: Perfect. And then lastly just on BMD, you know, it sounds like general line is pretty stable in terms of gross margin percentage.

Speaker Change: and I guess we look at kind of the last two years. [inaudible]

Speaker Change: outside of quarter to quarter noise, you know, you guys have been kind of 15% plus on gross margin, is that it's still attainable for 2025 or given some of these dynamics is that maybe a little bit optimistic?

Speaker Change: Yeah, I think 15% is still certainly attainable and we're a little bit below that this quarter, you know, didn't have a lot of opportunity on the commodity side and, you know, there was some competitive pressures, but I think definitely 15% is it.

Speaker Change: Attainable given the mix shift we've seen and especially as we had here into the second third quarter where you start to see a bit a bit of a richer product mix typically. So, short answer is yes on the 15% Kurt.

Perfect. Alright, thank you very much.

Thank you. Thanks, Rick.

One moment for our next question.

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

George Stappos: Hi everyone, good morning. Thanks for the details. Just a couple of quick ones to tag on to the existing question of the raft. Can you talk a little bit about the competitive

George Stappos: EWP, and are you seeing it more from existing, you know, engineered players, or are you seeing it more because of or from, you know, either dimensional or from folks producing open web trusses?

Secondly, and it sounds like everything is fine here.

George Stappos: But in terms of the 13% improvement that you're seeing in daily sales so far in 2Q

George Stappos: Any, you know, change or anything, any trend that we should be aware of in terms of mix, velocity, you know, again, something like everything is fine if you just want to check that box, guys.

For more information visit www.FEMA.gov

George Stappos: So maybe on the EWP, let me say George Staphos, this is on the EWP side of things. I think, you know, what we're seeing is, you know, the narrative on 2x10s and open web trusses is...

George Stappos: largely consistent and steady and not a lot there. So where we generally see the competitive challenges is with EWP producers.

George Stappos: And so that's something that we are committed to making sure we're competitive [inaudible]

George Stappos: and in marketing each and every day for our customers. Both are direct customers as well through the channel. And so that's been the backdrop in terms of the competitive nature. And that's been a place here for several quarters. And so that's been a place where we're going to have our customers.

George Stappos: So that would be probably kind of our current view on EWP and what we're seeing and what we're expecting there relative to the competitive nature. Yeah, and then I guess the second part of your question, George, was around the 13%

George Stappos: Sequential Inquiries we've seen so far in the Daily Sales phase in VMD, which that map tells you it's about $25 million a day through April , compared to the 22.3-week experience of the first quarter. You know, I wouldn't say there's any...

George Stappos: Big mix shift or anything like that is really just a function of, you know, the spring building season, better weather, and you know, really out of the gates, you're pretty strong in there for which is great, if you do the math.

George Stappos: 25 million each a day times 64 days, you'll see.

George Stappos: You know, BND tick out $1.6 billion or so in Revenue in the second quarter, which would be up $200 million million dollars.

George Stappos: Sequentially, and so it gives you a good sense of the gross margin dollar opportunity and the better leverage you can get in our cost base that we expect to put up a certainly an approved number here in the second quarter of BND.

George Stappos: Yeah, Kelly, I appreciate that. What I was getting at and maybe could have posed a question definitely just it seems like momentum has actually continued to accelerate. It's not like we're at 13% but there's been a fade more recent. I was more or less just.

George Stappos: Confirming that or not if you want to comment. Along with that, can you give a quick comment on the door strategy, how that's how that's working.

Speaker Change: And are there any elements of the supply chain into BMD that we, you know, should be mindful of relative tariffs, you know, any difficulties getting product that you need or you're in pretty good shape there? Thanks a good luck in the quarter.

Speaker Change: Yeah, so yeah, just a good follow up. Yeah, so that that pace I referenced as, you know, has continued, you know, through the first few days in April . And so we feel good about that. And then in terms of the doors and supply chain, I'll let Jeff lead the conversation there. Yeah, hey, this is Jeff on the door side. That strategy is going well. And I'll tell you the the acquisitions we made the newer shops. Yeah.

Jeff Strum: They're growing and you can see it and you know when you greenfield one as we have you know, it's a process and it takes time and they certainly are and then you have the acquisitions and they're obviously faster but you can see them growing and then legacy ones we have they picked up significantly so you know, it's working just the way we want it [inaudible]

Okay, now Tara, some spludging.

Nate Jorgensen: Yes, George Staphos, I would say in tariffs I would say overall for both for wood products and B&D there's kind of limited impact, they're you know for us it's a you know predefined

Nate Jorgensen: and Wood Products, most of our production, as you know, is US-based, and so that doesn't really represent an issue for us in Wood Products, given the current environment today.

for distribution.

Nate Jorgensen: So, Tarris would represent a very similar theme as to anything else that we would think about there.

Nate Jorgensen: specific to, there are some certain products, do you think about it in our general line? Many of our metal products are imported, and in some cases, George's limited options on where you can pull those materials from.

Nate Jorgensen: I guess the good news here is we have some familiarity with the story just given the COVID issues in terms of the resiliency and kind of the redundancy in some cases with our supply chain.

Nate Jorgensen: and that remains part of our plan going forward but relatively the impact is very modest today and if anything would be a general line just on some of those, again kind of the metal products would be the area that we're currently focused.

Nate Jorgensen: Thanks so much, Nick. Good luck on the quarter, guys. Thanks.

One moment for our next question.

Speaker Change: Our next question comes from the line of Jeff Stevenson of Loop Capital. Your line is now open.

Nate Jorgensen: Hey, good morning, guys. This is actually Zach Pacheco on for Jeff this morning.

Thank you. Bye.

Speaker Change: Hey, how you guys doing? Maybe to start, given the current pricing environment, can you just provide some more colors specifically on how you're looking at LVL, kind of through the remainder of the year, more on the volume side? I believe last quarter sharegames were called as a positive, so just curious if there's any update from a share game perspective. Thanks. Thanks.

Yeah, as Kelly mentioned, you know, Q1, we were down.

Speaker Change: 3%, not quite as much as the housing starts. Also, he referenced the fact it's so far starting up to Q2.

You know, seasonal bomb and volumes that were indicated in the charge.

Nothing's got any more on that [inaudible]

Speaker Change: that our share of production as well as our volumes relative to single-family starts have looked very strong. And again, we think that's very much a function of one having best-in-class products and best-in-class distribution tied together and we continue to believe that's the right approach.

Speaker Change: A sequential improvement in terms of EBITDA margins to add or above 5% in the next quarter. Given the adverse weather you're experiencing in this quarter or do you think softer residential demand fundamentals are continued away on 7 margins. Thanks.

Speaker Change: Yeah, so yeah, I feel good about and I alluded to this a bit in my comments that March, you know, when we saw a more normal sales face, we got our EBITDA margins back to what you've seen in recent quarters, you know, kind of that.

Speaker Change: That mid-five range, if you will. And so given where we've started in April , and given the pace we've seen, we feel really good about our opportunity to again be in the mid-fives for a second quarter. And then a couple of the comments here from Joe.

Speaker Change: Yeah, hi there. So if our competitive positioning in the market, I think we're set up really well.

Speaker Change: Our National Footprint allows us to shift our volume into pockets of strength across the country.

also helps us to serve as the national dealers [inaudible]

Who Want Need Consistence Service? [inaudible]

Speaker Change: across the country. We're aligned with many of the big builders and the dealers and their strength in times of market weakness, but at the same time our decentralized model allows us to support and serve the local and regional dealers and builders as well and be flexible to their needs.

Speaker Change: We've got great partnerships with our customers, with our suppliers, and really our integrated model of manufacturing is a key part of driving our success.

Makes sense. Thanks for the collar.

Thank you, Zach.

Speaker Change: As a reminder, to ask a question, please press Star 11 on your telephone and wait for your name to be announced.

Speaker Change: Our next question comes in the line of Ketan Mamtora of BMO Capital Markets. Your line is now open.

Ketan Memtura: Thank you and good morning. Perhaps to start with on Q2 EWP volumes, and if I'm doing my math correctly here, it sounds like on eye joist, you know, volumes would be down about double digits on a year over your basis. I'm.

Speaker Change: Can you tell, can you talk about sort of, you know, books and takes, you know, what's kind of driving that, you know, sort of a pretty meaningful year over your decline and volume?

Speaker Change: Yeah, I think it's really just a function of housing starts last year versus the housing start assumption for this year, Ketan. It's really...

Speaker Change: It's really that. It's not a loss of market share or a change in usage in terms of floor products. It's not that. It's really just a function of the underlying market conditions today.

Speaker Change: I see, okay, got it. And then, you know, if I look at your inventories at the end of Q1 versus kind of your total inventories, the end of, you know, Q1 of last year, it's again up like kind of on a 12-13% something in that range.

Speaker Change: Can you sort of talk to how you sort of feel about the overall level of inventories given sort of the housing backdrop which has been in a sort of chopper, you know, we talked about things off to a slower than expected start.

Speaker Change: Let me let Jeff kind of feel that initially, the question around inventory and what we're seeing, what we were at here in the first quarter and relative to our expectation.

Speaker Change: Hey, it's Jeffy, our aiming position you'll feel good about it. We, um,

Speaker Change: When the Winter Bies came and Opportunisher Bies, we fully took advantage of that [inaudible]

And I'm out. Bye bye. Bye bye.

Speaker Change: Lee knew that pretty heavily. We also look at, you know, with the market that we're in right now, we know it is very much.

Speaker Change: A distribution friendly market and people relying on us. Our suppliers are relying on us to have it and our customers are relying on us to have it and get them there on time. So we've leaned into that and made sure that we were stocked and ready for that.

Speaker Change: On the deal with side of things, what we're seeing out there without a doubt, it is lean overall. A couple areas where it might be heavy if they leaned in for tariffs, but overall it is lean and deeper relying on distribution, and we're ready to serve.

Speaker Change: That's a helpful color. And then, you know, maybe last one for Nate. You know, there's been, you know, a couple of transactions here recently, you know, one

Speaker Change: You know, on kind of, you know, one of your kind of supplier side and then one on the, you know, Pro Dealers side.

Speaker Change: Pretty meaningful transaction. How do you, you know, sort of think about potential impact, if any, you know, over the next several years here?

Speaker Change: Yeah, good question, Keaton. I think when it comes to your point, some of the consolidation that's taken place both upstream and downstream, you know from Boise Cascade, you know that that has been you know a theme here over the past number of years and certainly is continuing and obviously it's some of an important examples in front of us today.

Speaker Change: I think as we, you know, so we are, I think, well positioned in the marketplace and well positioned with those relationships. And I think the council that we continue to work internally and externally is we're going to stay really focused on the here now.

Speaker Change: and executed a very high level for the benefit of both those suppliers, and what our customers deserve and expect going forward. So I think we are in a very important part of the equation for our suppliers and we got to continue to earn that each and every day, same with our customers. Thank you very much.

Speaker Change: But the consolidation, those trends that those have been taken place, we expect those likely to take place going forward and that just it really requires us to make sure that we're focused on executing at a very very high level each and every day.

God, that's very helpful. Good luck.

Thank you [inaudible]

One moment for our next question.

Speaker Change: Our next question comes from the line of Reuben Garner of Benchmark. Your line is now open.

Reuben Garner: Thank you. Good morning, guys. Apologies if I repeat anything. I missed the first part of the call. A big picture question for you.

Reuben Garner: Pre 2020 levels for you guys, but on a higher level of starts is the difference between what you would have seen back then and today

Reuben Garner: Dives in type of homes, or is there some other dynamic? Are you guys thinking about, you know, your volume versus your price differently than maybe you did five or six years ago, just any color there would be helpful.

Nate Jorgensen: Yeah, Reuben, it's Nate. I'll, you know, that good question. I think in terms of, you know, what we're experiencing, I don't think it's anything in terms of, you know, kind of change, eye joys versus maybe open web or dimensional lumber. You know, there can be some around the edges. [inaudible]

Nate Jorgensen: I think much of that is probably Perron, maybe home size in the home footprint and also where that construction, where that start resides.

Nate Jorgensen: So, if it's some examples, for example, if you're in a market like Phoenix, it's a slab on gray market, single story construction, that represents a much different opportunity than compared to, you know, at Denver, Colorado as an example where typically two story construction with the basement. So,

Nate Jorgensen: I think, you know, in terms of where that start resides and the strength that we've seen in the, you know, the Sunshine States, you know, the Florida's and Texas and Arizona. Yeah, I think that's been a contributing factor in terms of what that. [inaudible]

Nate Jorgensen: Real Floor Opportunity Represents for IJoyce and Framing Materials here today in 2025.

Nate Jorgensen: And so Nate, as that relates to price, I mean your pricing is still up nicely since then. I know I'm sure you have.

Nate Jorgensen: A ton of areas of inflation in your own regard, but how do we think about just kind of downside from here given where the volume environment is? What does the supply or to pass utilization for the industry look like today versus maybe what it did? [inaudible]

in that period five, six years ago. . .

In April , we were above that level. It was probably low 80s. And so I don't have-

Nate Jorgensen: 2019 in my still in my memory bank, but I think our operating rate relative to the demand environment today, we feel good about it. And again, having the connection between manufacturing and distribution is important.

Reuben Garner: Great. Thanks, guys, and good luck in this coming quarter. Thank you, Reuben. Thanks, Reuben.

Speaker Change: I'm showing no further questions at this time. I would now like to turn it back to Nate Jorgensen's EO closing remarks.

Speaker Change: Great. Thanks. We appreciate it. Want to join us this morning for our update and earnings call. Thank you for your continued interest and support. Boise Cascade, be safe and be well. Thank you.

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

Thank you.