Q1 2026 Boise Cascade Co Earnings Call

May 5, 2026

Operator 2: Good morning. My name is Jason, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade's Q1 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad. To withdraw your question, please press Star then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Forrey, Senior Vice President of Finance & Investor Relations. Mr. Forrey, you may begin your conference.

Operator: Good morning. My name is Jason, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade's Q1 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on your telephone keypad. To withdraw your question, please press Star then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Forrey, Senior Vice President of Finance & Investor Relations. Mr. Forrey, you may begin your conference.

Speaker #2: All lines have been placed on mute to prevent any background noise. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Speaker #2: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad.

Speaker #2: To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Forrey, Senior Vice President of Finance and Investor Relations, Mr. Forrey, you may begin your conference.

Speaker #2: Thank you, Jason, and good morning, everyone. I would like to welcome you to Boise Cascade's first quarter 2026 earnings call and business update. Joining me on today's call are Jeff Strum, our CEO; Kelly Hibbs, our CFO; Joe Barney, Leader of our Building Materials Distribution Operations; and Troy Little, Leader of our Wood Products Operations.

Chris Forrey: Thank you, Jason. Good morning, everyone. I'd like to welcome you to Boise Cascade's Q1 2026 Earnings Call and Business Update. Joining me on today's call are Jeff Strom, our CEO, Kelly Hibbs, our CFO, Joanna Barney, leader of our building materials distribution operations, and Troy Little, leader of our wood products operations. Turning to slide 2. This call will contain forward-looking statements. Please review the warning statements in our press release, on the presentation slides, and in our filings with the SEC regarding the risks associated with these forward-looking statements. Also, please note that the appendix includes reconciliations from our GAAP net income to EBITDA and adjusted EBITDA and segment income or loss to segment EBITDA. I will now turn the call over to Jeff.

Chris Forrey: Thank you, Jason. Good morning, everyone. I'd like to welcome you to Boise Cascade's Q1 2026 Earnings Call and Business Update. Joining me on today's call are Jeff Strom, our CEO, Kelly Hibbs, our CFO, Joanna Barney, leader of our building materials distribution operations, and Troy Little, leader of our wood products operations. Turning to slide two. This call will contain forward-looking statements. Please review the warning statements in our press release, on the presentation slides, and in our filings with the SEC regarding the risks associated with these forward-looking statements. Also, please note that the appendix includes reconciliations from our GAAP net income to EBITDA and adjusted EBITDA and segment income or loss to segment EBITDA. I will now turn the call over to Jeff.

Speaker #2: 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.

Speaker #2: Also, please note that the appendix includes reconciliations from our GAAP net income to EBITDA and adjusted EBITDA, and segment income or loss to segment EBITDA.

Speaker #2: I will now turn the call over to Jeff.

Speaker #3: Thanks, Chris. Good morning, everyone, and thank you for joining us for our earnings call. I'm on slide three. As I step into the role of CEO, I want to express my deep confidence in our company, our talented people, and our established direction.

Jeff Strom: Thanks, Chris. Good morning, everyone, and thank you for joining us for our earnings call on slide 3. As I step into the role of CEO, I want to express my deep confidence in our company, our talented people, and our established direction. We have a strong foundation and a proven strategy that has positioned us well in the marketplace, and I'm committed to building on that momentum. My thanks to our outstanding team, whose dedication, expertise, and commitment to our customer and supplier partners are what drive our continued success. I'm excited to lead us forward, focused on delivering sustained value for all of our stakeholders. Now let me turn to our Q1 results. Total US housing starts increased 1% compared to the prior year quarter. However, single-family housing starts were off 5% for the same comparative period.

Jeff Strom: Thanks, Chris. Good morning, everyone, and thank you for joining us for our earnings call on slide three. As I step into the role of CEO, I want to express my deep confidence in our company, our talented people, and our established direction. We have a strong foundation and a proven strategy that has positioned us well in the marketplace, and I'm committed to building on that momentum. My thanks to our outstanding team, whose dedication, expertise, and commitment to our customer and supplier partners are what drive our continued success. I'm excited to lead us forward, focused on delivering sustained value for all of our stakeholders. Now let me turn to our Q1 results. Total US housing starts increased 1% compared to the prior year quarter. However, single-family housing starts were off 5% for the same comparative period.

Speaker #3: We have a strong foundation and a proven strategy that has positioned us well in the marketplace, and I'm committed to building on that momentum.

Speaker #3: My thanks to our outstanding team whose dedication, expertise, and commitment to our customer and supplier partners are what drive our continued success. I'm excited to lead us forward, focused on delivering sustained value for all of our stakeholders.

Speaker #3: Now let me turn to our first quarter results. Total US housing starts increased 1% compared to the prior year quarter. However, single-family housing starts were off 5% for the same comparative period.

Speaker #3: Our consolidated first quarter sales of $1.5 billion were down 2% from first quarter of 2025. Our net income was $17.8 million for a 50 cents per share compared to net income of $40.3 million or $1.06 per share in the year-ago quarter.

Jeff Strom: Our consolidated Q1 sales of $1.5 billion were down 2% from Q1 2025. Our net income was $17.8 million, or $0.50 per share, compared to net income of $40.3 million or $1.06 per share in the year-ago quarter. Our businesses delivered solid results for the quarter despite continued demand uncertainty resulting from geopolitical events, volatile mortgage rates, and severe weather. The challenges of consumer sentiment and home affordability remain the most significant headwinds for residential construction activity. In this environment, we're continuing to leverage our integrated model, which consistently demonstrates its value and resilience, particularly in challenging market conditions like these.

Speaker #3: Our business has delivered solid results for the quarter, despite continued demand uncertainty resulting from geopolitical events, volatile mortgage rates, and severe weather. The challenges of consumer sentiment and home affordability remain the most significant headwinds for residential construction activity.

Speaker #3: In this environment, we are continuing to leverage our integrated model, which has consistently demonstrated value and resilience, particularly in challenging market conditions like these. As a follow-up to our previously disclosed legal matter that was resolved last week, this was a legacy issue involving certain hardwood plywood purchases made at a single distribution facility in Pompano, Florida, between 2017 and 2021.

Jeff Strom: As a follow-up to our previously disclosed legal matter that was resolved last week, this was a legacy issue involving certain hardwood plywood purchases made at a single distribution facility in Pompano, Florida between 2017 and 2021. We bought the wood from a former US-based supplier that improperly imported the products. We were not involved in creating or operating the supplier's scheme. We did not follow some of our own internal processes that would have prevented us from making these purchases. We've taken responsibility for that and have strengthened our processes to prevent this from happening again. Kelly will now walk through our segment financial results, capital allocation priorities, and Q2 guidance, after which I'll provide insights on our business outlook and make closing comments before we open the call for questions. Kelly?

Speaker #3: We bought the wood from a former US-based supplier that improperly imported the products. We were not involved in creating or operating the supplier's scheme but we did not follow some of our own internal processes that would have prevented us from making these purchases.

Speaker #3: We've taken responsibility for that and have strengthened our processes to prevent this from happening again. Kelly will now walk through our segment financial results, capital allocation priorities, and second quarter guidance, after which I'll provide insights on our business outlook and make closing comments before we open the call for questions.

Speaker #3: Kelly.

Speaker #2: Thank you, Jeff. Good morning, everyone. B&B's sales this quarter were $1.4 billion, down 1% from first quarter of 2025. B&B reported segment EBITDA of $48.2 million in the first quarter compared to segment EBITDA of $62.8 million in the prior year quarter.

Kelly Hibbs: Thank you, Joe. Good morning, everyone. BMD sales for Q1 were $1.4 billion, down 1% from Q1 2025. BMD reported segment EBITDA of $48.2 million in Q1, compared to segment EBITDA of $62.8 million in the prior year quarter. Selling and distribution expenses were up $8.2 million from Q1 2025. In addition, gross margin dollars decreased $6.5 million compared to the prior year quarter, affecting lower gross margins on all product lines, particularly EWP. In Wood Products, our sales in Q1, including sales to our distribution segment, were $398.2 million, down 4% compared to Q1 2025. Wood Products segment EBITDA was $32 million, compared to EBITDA of $40.2 million reported in the year-ago quarter.

Speaker #2: Selling and distribution expenses were up 8.2 million from first quarter of 2025. In addition, gross margin dollars decreased 6.5 million compared to the prior year quarter, affecting lower gross margins on all product lines, particularly EWP.

Speaker #2: In wood products, our sales in the first quarter, including sales to $398.2 million, down 4% compared to first quarter of 2025. Wood products segment EBITDA was $32 million, compared to EBITDA of $40.2 million reported in the year-ago quarter.

Speaker #2: The decrease in segment EBITDA was due primarily to lower EWP sales prices, as well as higher per-unit EWP conversion costs. These decreases were offset partially by lower per-unit OSB costs, as well as higher plywood sales volumes and prices.

Kelly Hibbs: The decrease in segment EBITDA was due primarily to lower EWP sales prices as well as higher per-unit EWP conversion costs. These decreases were offset partially by lower per-unit OSB costs as well as higher plywood sales volumes and prices. Moving to slides 5 and 6. BMD's year-over-year Q1 sales decline of 1% was driven by net sales price decreases of 3%, offset partially by net sales volume increases of 2%. By product line, general line product sales increased 4%, commodity sales decreased 5%, and sales of EWP decreased 7%. Sequentially, BMD sales were up 2% from Q4 2025. Weather had a significant impact on Q1 sales activity at our Southeast and Northeast distribution centers, as the affected locations were closed for a combined 35 days in January and February.

Speaker #2: Moving to slides five and six. B&B's year-over-year first quarter sales decline, off volume increases of 2%. By product line, General Line product sales increased 4%, Commodity sales decreased 5%, and sales of EWP decreased 7%.

Speaker #2: Sequentially, B&B's sales were up 2% from the fourth quarter of 2025. Weather had a significant impact on first quarter sales activity at our Southeast and Northeast distribution centers, as the affected locations were closed for a combined 35 days in January and February.

Speaker #2: The impacts were evident in B&B's daily sales pace during the quarter, with daily sales of approximately $21 million in both January and February, before rebounding nicely in March to $24 million.

Kelly Hibbs: The impacts were evident in BMD's daily sales pace during the quarter, with daily sales of approximately $21 million in both January and February before rebounding nicely in March to $24 million. Our Q1 gross margin was 14.4%, down 30 basis points year over year. The decline was driven by EWP competitive pricing pressures as well as lower margins on general line products. BMD's EBITDA margin was 3.5% for the quarter, down from both the 4.5% reported in the year-ago quarter and the 4.1% reported in the Q4. Lower gross margins, coupled with the effects on our operating expense leverage from branch closures in the Q1, negatively impacted our EBITDA margin result. Turning to slide 7. On a year-over-year basis, Q1 I-joist and LVL volumes were down 5% and 1% respectively.

Speaker #2: Our first quarter gross margin was 14.4%, down 30 basis points year-over-year. The decline was driven by EWP competitive pricing pressures as well as lower margins on general line products.

Speaker #2: B&B's EBITDA margin was 3.5% for the quarter, down from both the 4.5% reported in the year-ago quarter and the 4.1% reported in the fourth quarter.

Speaker #2: Lower gross margins coupled with the effects on our operating expense leverage from branch closures in the first quarter negatively impacted our EBITDA margin result.

Speaker #2: Turning to slide seven. On a year-over-year basis, first quarter IJOICE and LVL volumes were down 5% and 1%, respectively. Sequential IJOICE and LVL volumes were up 16% and 8%, respectively, driven by seasonal demand improvements and channel restocking ahead of the spring building season.

Kelly Hibbs: Sequential I-joist and LVL volumes were up 16% and 8% respectively, driven by seasonal demand improvements and channel restocking ahead of the spring building season. As it relates to pricing, Q1 EWP sales prices declined about 7% year-over-year but remained flat sequentially. Turning to slide 8. Our Q1 plywood sales volume was 373 million feet compared to 363 million feet in Q1 of 2025. The year-over-year increase in plywood volumes was due primarily to the restart of operations at our Oakdale mill in Q4 of 2025. Sequentially, our plywood sales volumes were up 5% from Q4 of 2025, as anticipated, due to seasonal demand improvement.

Speaker #2: As it relates to pricing, first quarter EWP sales prices declined about 7% year-over-year but remained flat sequentially. Turning to slide eight. Our first quarter plywood sales volume was 373 million feet compared to 363 million feet in first quarter 2025.

Speaker #2: The year-over-year increase in plywood volumes was due primarily to the restart of operations at our Oakdale mill in fourth quarter 2025. Sequentially, our plywood sales volumes were up 5% from fourth quarter 2025, as anticipated, due to seasonal demand improvement.

Speaker #2: The average plywood net sales price was $343 per thousand in the first quarter, representing a 1% increase year-over-year and 4% sequentially. We attribute the recent improvement in plywood pricing primarily to weather-related supply constraints in the south, combined with reduced imports.

Kelly Hibbs: The average plywood net sales price was $343 per thousand in Q1, representing a 1% increase year over year and 4% sequentially. We attribute the recent improvement in plywood pricing primarily to weather-related supply constraints in the South, combined with reduced imports. Notably, Brazilian imports declined by more than 60% year over year in Q1 2026. Following the late February Supreme Court decision that invalidated the use of IEEPA to impose tariffs, higher import volumes are anticipated, which are expected to influence market dynamics in the coming months. I'm now on slide 9. We had capital expenditures of $40 million in Q1, with $23 million of spending in BMD and $17 million of spending in Wood Products.

Speaker #2: Notably, Brazilian imports declined by more than 60% year-over-year in the first quarter of 2026. However, following the late February Supreme Court decision that invalidated the use of IEPA to impose tariffs, higher import volumes are anticipated, which are expected to influence market dynamics in the coming months.

Speaker #2: I'm now on slide nine. We had capital expenditures of $40 million in the first quarter, with $23 million of spending in B&B and $17 million of spending in wood products.

Speaker #2: Our capital spending range for 2026 remains at $150 to $170 million. Roughly a third of B&B's 2026 spending relates to growth projects across our system, with the balance of our spending in both segments attributable to business improvement and efficiency projects, replacement projects, and ongoing environmental compliance.

Kelly Hibbs: Our capital spending range for 2026 remains at $150 to 170 million. Roughly a third of BMD's 2026 spending relates to growth projects across our system, with the balance of our spending in both segments attributable to business improvement and efficiency projects, replacement projects, and ongoing environmental compliance. Speaking to shareholder returns, we paid $10 million in dividends during the quarter. Our board of directors also recently approved a $0.22 per share quarterly dividend on our common stock that will be paid in mid-June. Through the first 4 months of 2026, we've repurchased approximately $91 million of our common stock, including approximately $66 million in Q1. Since the beginning of 2024, we have repurchased approximately 12% of our outstanding shares.

Speaker #2: Speaking to shareholder returns, we paid $10 million in dividends during the quarter. Our board of directors also recently approved a $22 cent per share quarterly dividend on our common stock that will be paid in mid-June.

Speaker #2: Through the first four months of 2026, we repurchased approximately $91 million of our common stock, including approximately $66 million in the first quarter. Since the beginning of 2024, we have repurchased approximately 12% of our outstanding shares.

Speaker #2: As of today, approximately $148 million of our outstanding common stock is available for repurchase under our existing share repurchase program. As expected, we utilized cash in the first quarter, primarily driven by seasonal working capital needs along with our planned capital investments and shareholder returns.

Kelly Hibbs: As of today, approximately 148 million of our outstanding common stock is available for repurchase under our existing share repurchase program. As expected, we utilized cash in Q1, primarily driven by seasonal working capital needs along with our planned capital investments and shareholder returns. However, the ongoing strength of our balance sheet remains in place, which positions us well to continue the pursuit of our strategic objectives. I'm now on slide 10, where we have outlined a range of potential EBITDA outcomes for Q2, along with the key assumptions underlying these projections. As we look ahead, end market demand remains uncertain and certain cost inputs are volatile. For BMD, we currently estimate Q2 EBITDA to be between $65 million and $80 million. BMD's current daily sales pace is approximately 15% above the Q1 sales pace of $22 million per day.

Speaker #2: However, the ongoing strength of our balance sheet remains in place which positions us well to continue the pursuit of our strategic objectives. I'm now on slide 10.

Speaker #2: Where we have outlined a range of potential EBITDA outcomes for the second quarter, along with the key assumptions underlying these projections. As we look ahead, end-market demand remains uncertain, and certain cost inputs are volatile.

Speaker #2: For B&B, we currently estimate second quarter EBITDA to be between $65 and $80 million. B&B's current daily sales pace is approximately 15% above the first quarter sales pace of $22 million per day.

Speaker #2: Gross margins are expected to be between 14.25% and 15%. Importantly, as our guide suggests, if our current sales pace is sustained, we expect B&B to show a healthy sequential improvement in EBITDA margin.

Kelly Hibbs: Gross margins are expected to be between 14.25% and 15%. Importantly, as our guide suggests, if our current sales pace is sustained, we expect BMD to show a healthy sequential improvement in EBITDA margin. For Wood Products, we estimate Q2 EBITDA to be between $32 million and $47 million. Our EWP order files are showing seasonal strength, and we expect sales volumes to increase mid-single digits sequentially. EWP pricing is expected to range from flat to low single-digit decline sequentially. In plywood, we expect sequential volume increases in the mid-single digits. On plywood pricing, quarter to date realizations were 8% above our Q1 average, with the balance of the quarter market dependent.

Speaker #2: For Wood Products, we estimate second quarter EBITDA to be between $32 million and $47 million. Our EWP order files are showing seasonal strength, and we expect sales volumes to increase mid-single digits sequentially.

Speaker #2: EWP pricing is expected to range from flat to low single digit declines sequentially. In plywood, we expect sequential volume increases in the mid-single digits.

Speaker #2: On plywood pricing, quarter-to-date realizations were 8% above our first quarter average, with the balance of the quarter market dependent. We expect our per-unit manufacturing costs will be comparable to first quarter as higher volumes and early results from focus site improvement plans across our manufacturing system are expected to offset recent energy-related cost increases.

Kelly Hibbs: We expect our per unit manufacturing cost will be comparable to Q1, as higher volumes and early results from focused site improvement plans across our manufacturing system are expected to offset recent energy-related cost increases. I will turn it over to Jeff Strom to share our business outlook and closing remarks.

Speaker #2: I will turn it over to Jeff to share our business outlook and closing remarks.

Speaker #3: Thank you, Kelly. I'm on slide 11. Given the current environment, visibility into end-market demand for 2026 is limited. For much of the first quarter, mortgage rates declined to the lowest level in over three years.

Jeff Strom: Thank you, Kelly. I'm on slide 11. Given the current environment, visibility into end market demand for 2026 is limited. For much of Q1, mortgage rates declined to the lowest level in over 3 years. Recent geopolitical turmoil has led to volatility in Treasury and mortgage rates alike, introducing greater uncertainty on the remainder of the spring selling season. Home builders are responding to the cautious demand environment with thoughtful approaches to starts, home sizes, location, and inventory. Maintaining our focus and staying agile remains central to Boise Cascade's strategy for delivering outstanding service across a broad selection of in-stock, industry-leading building materials in any operating environment. The alignment of our two business segments is evident every day, is a driving force in our world-class operations.

Speaker #3: However, recent geopolitical turmoil has led to volatility in treasury and mortgage rates alike. Introducing greater uncertainty on the remainder of the spring selling season.

Speaker #3: Home builders are responding to the cautious demand environment with thoughtful approaches to starts, home sizes, location, and inventory. As a result, maintaining our focus and staying agile remains central to Boise Cascade's strategy for delivering outstanding service across a broad selection of in-stock, industry-leading building materials, in any operating environment.

Speaker #3: The alignment of our two business segments is evident every day and is driving force in our world-class operations. Enhanced channel visibility supports the alignment of our production rates and inventory strategies with end-market demand.

Jeff Strom: Enhanced channel visibility supports the alignment of our production rates and inventory strategies with end market demand. Cross-divisional coordination and our strong financial position provide the security and flexibility for our teams to execute our strategy and deliver long-term value creation. We are committed to continuously seeking new opportunities to leverage our integrated model by driving greater efficiency, responsiveness, and innovation across our organization. As we consider the future of home building, we remain confident in the structural drivers of US housing demand, which include the persistent undersupply of housing driven by generational tailwinds, near-record levels of homeowner equity, a decade of under-building, and an aging US housing stock, with the average home being more than 40 years old. The strong fundamentals for both new residential construction and repair and remodeling reinforce the industry's favorable outlook.

Speaker #3: Cross-divisional coordination and our strong financial position provide the security and flexibility for our teams to execute our strategy and deliver long-term value creation. We're committed to continuously seeking new opportunities to leverage our integrated model by driving greater efficiency, responsiveness, and innovation across our organization.

Speaker #3: As we consider the future of home building, we remain confident in the structural drivers of US housing demand. Which include the persistent undersupply of housing driven by generational tailwinds, near-record levels of homeowner equity, a decade of underbuilding, and an aging US housing stock with the average home being more than 40 years old.

Speaker #3: The strong fundamentals for both new residential construction and repair and remodeling reinforce the industry's favorable outlook. Boise Cascade's investments throughout the business cycle give us confidence that we can outpace industry growth as these market tailwinds materialize.

Jeff Strom: Boise Cascade's investments throughout the business cycle give us confidence that we can outpace industry growth as these market tailwinds materialize. Thank you for joining us today and for your continued support and interest. We welcome any questions at this time. Jason, please open the phone lines.

Speaker #3: Thank you for joining us today and for your continued support and interest. We welcome any questions at this time. Jason, please open the phone line.

Speaker #1: Thank you. We'll now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.

Operator 2: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Our first question comes from Michael Roxland from Truist Securities. Please go ahead.

Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Our first question comes from Michael Roxland from Truist Securities. Please go ahead.

Speaker #1: To withdraw your question, please press star then two. Our first question comes from Mike Roxland from Truist Securities. Please go ahead.

Michael Roxland: Yes. Thank you, Jeff, Kelly, Chris, for taking my questions. First question I had, Kelly, just in response to one of your comments regarding our Brazilian imports and the lower tariffs. You mentioned expecting to see them in coming months. Have you started to see any increased plywood or wood flows from Brazil at this juncture?

Speaker #4: Yeah. Thank you, Jeff, Kelly, Chris, for taking my questions. First question I had, Kelly, just in response to one of your comments regarding our Brazilian imports.

Speaker #4: And, and a lower tariffs. You mentioned expecting to see them in coming months. Have you started to see any increased plywood or wood flows from Brazil at this juncture?

Speaker #5: Yeah. So my understanding, Mike, is that the short answer is yes. There's be we're expecting to see more and more of that show up at the ports.

Joanna Barney: Yeah. My understanding, Mike, is that the true answer is yes. We're expecting to see more and more of that show up at the ports. Maybe a little bit delayed because there was a phenol disruption at a manufacturing site in Brazil. We know the wood is coming and we're seeing quotes show up in the coming months. Jeff, do you have some more color on that?

Jo Barney: Yeah. My understanding, Mike, is that the true answer is yes. We're expecting to see more and more of that show up at the ports. Maybe a little bit delayed because there was a phenol disruption at a manufacturing site in Brazil. We know the wood is coming and we're seeing quotes show up in the coming months. Jeff, do you have some more color on that?

Speaker #5: maybe a little bit delayed because there was, a phenol a phenol disruption at a at a manufacturing site in Brazil. But, but we know the wood is coming.

Speaker #5: A-and, and, and we're seeing quotes show up in, in the coming months. Jeff, do you have some more color on that?

Speaker #3: Yeah, I would add that. There have been some that have showed up, but not significant enough that that would cause any major impact.

Troy Little: I would add that there has been some that have showed up, but not significant enough that that would cause any major impact.

Jeff Strom: I would add that there has been some that have showed up, but not significant enough that that would cause any major impact.

Speaker #1: Got it.

Michael Roxland: Got it. It also seems like, my second question, EWP prices in Q1 sort of stabilized quarter over quarter. Though one of your peers was showing, you know, mid-single digit decline in pricing. Can you provide any more color around what's driving, you know, the price stability in your business maybe versus some of your peers? I just, you know, I recall over the last couple of years that obviously pricing was down. I think you had some uncompetitive competitiveness in the business as particularly some of your peers were aggressive in trying to grow a business. I'm just wondering how you were able to show stable pricing relative to peers who still had a mid-single digit price decline.

Speaker #4: And also seems like my second question, just, EBI EWP prices in one queue sort of stabilized quarter over quarter. one of your the one of your peers was, was showing, you know, mid-single digits de- decline in pricing.

Speaker #4: Can you provide any more color around what's driving, you know, the price stability in your business, maybe versus some of your peers?

Speaker #4: I, I—I'm just, you know, I recall over the last couple of years that, obviously, pricing was down. I think you had some uncompetitiveness in the business, particularly as some of your peers were aggressive in trying to drive up business.

Speaker #4: I'm just wondering how you were able to show stable pricing relative to peers who still had a mid-single digit price decline.

Speaker #5: Yeah, this is Troy. I'll take a crack at that. yeah. I mean, we were able to hold prices, s you know, relatively flat since Q3 of last year.

Troy Little: Yeah, this is Troy. I'll take a crack at that. I mean, we were able to hold prices, you know, relatively flat since Q3 of last year. That's definitely not a function of less pressure in the market. It's come back. There's been more chatter. You know, there's regional pricing pressure from our competitors still. We got the you know, conversations with home builders and, you know, still a strong concern for home affordability. Right now, it's just a matter of being very strategic. Look, it's regional conversations, making sure that we are competitive, but, you know, we're not leading with price, leaning into our model, our service proposition. Fortunately, so far, we've been able to hold prices.

Speaker #5: but that's, definitely not a, a function of less pressure in the market. It, it's, it's come back. There's been more chatter. you know, there's regional pricing pressure from our competitors still.

Speaker #5: we got the, you know, conversations with home builders. And, you know, still a, a strong concern for home affordability. So right, right now, it's just a matter of being very strategic, look it's, regional conversations.

Speaker #5: making sure that we are competitive but, you know, we're not leading with price. Leading into our model, our service, proposition. so fortunately, so far, we've been able to hold prices but, and, and, you know, and right now, quite honestly, our order file is there's a we've got a strong, strong order file.

Troy Little: You know, and right now, quite honestly, our order file is we've got a strong order file, and so it allows us to be selective there in how we address our pricing.

Speaker #5: And so it allows us to be selective there in how we address our pricing.

Speaker #1: Got it. Thank you very much. The next question comes from Catan Mantora from BMO Capital Markets. Please go ahead.

Michael Roxland: Got it. Thank you very much.

Operator 2: The next question comes from Ketan Mamtora from BMO Capital Markets. Please go ahead.

Operator: The next question comes from Ketan Mamtora from BMO Capital Markets. Please go ahead.

Ketan Mamtora: Good morning. Thanks for taking my question. Perhaps to start with, can you talk about, you know, freight, transportation, inflation that you are seeing across both Wood Products and distribution? If you can quantify that headwind and kind of how are y'all mitigating that?

Speaker #6: Good morning, and thanks for taking my question. Perhaps to start with, can you talk about, you know, freight transportation inflation that you are seeing across both wood products and distribution?

Speaker #6: If you can quantify that headwind and, and kind of how are you all mitigating that?

Speaker #5: Yeah. Keith, this is, Troy. yeah. I mean, definitely in terms of, diesel prices, you know, we're seeing that in various aspects of our business.

Troy Little: Yeah. Ketan, this is Troy. Yeah, I mean, definitely in terms of diesel prices, you know, we're seeing that in various aspects of our business. The biggest one for us is probably in our resin costs. You know, that's the input cost that's affected related to the increase in prices. You know, we just have a recent increase. We really didn't see it in Q1 yet, late Q1 activity, but we did have a price increase probably ranging the 10% range around our resin. Then we've got some, you know, the direct costs. That's just, you know, if you think about just fuel for rolling stock and things like that, which is not a huge spend for us, that will be an impact.

Speaker #5: the biggest one for us is probably in our resin costs. you know, that's the input cost, that's affected related to the increase in prices.

Speaker #5: You know, we just have a recent increase. We really didn't see it in Q1 yet—late Q1 activity, but we did have a price increase.

Speaker #5: Probably ranging in the 10% range, around our resin. And then we've got some, you know, the direct cost. That's just, you know, if you think about just fuel for rolling stock and things like that, which is not a huge spend for us.

Speaker #5: but that will be an impact, moving, moving veneer around the system, is, is we'll see that in our wood costs. And then there's that indirect, I guess, if you want to call it.

Troy Little: Moving veneer around the system is we'll see that in our wood costs. Then there's that indirect, I guess, if you wanna call it. Every piece and part that comes into our system has probably got some type of inflationary pressure around freight. I'd say, you know, we're working on our cost control on the opposite side of that to help mitigate some of that. It's hard to quantify all that, but, you know, I think we're still comfortable that we should be, say, comparative on manufacturing costs, as Kelly mentioned.

Speaker #5: Every piece and part that comes into our system is probably got some type of, inflationary pressure around, freight. but I, I'd say, you know, we're working on our cost control on the opposite side of that to help mitigate some of that.

Speaker #5: So it's hard to quantify all that, but, you know, I think we're still comfortable that, we should be say comparative, manufacturing costs as Kelly mentioned.

Speaker #6: And then I'll jump in on, on the distribution business. So, you know, diesel rose significantly during the quarter. you know, we were paying almost double at the end of the quarter what we were paying at the beginning of it.

Joanna Barney: I'll jump in on the distribution business. You know, diesel rose significantly during the quarter. You know, we were paying almost 2x at the end of the quarter what we were paying at the beginning of it. Most of it we are able to pass on through our daily transactions with our customer base. You know, there are some fuel surcharges. I'd say our people have done a tremendous job at passing those along, but there's been some short-term impact to our margin on program business, where freight was included as part of the original program. At times, there's delays in what we're able to go out and recoup as far as those costs. I'd also add that, you know, the lack of trucks and drivers.

Jo Barney: I'll jump in on the distribution business. You know, diesel rose significantly during the quarter. You know, we were paying almost 2x at the end of the quarter what we were paying at the beginning of it. Most of it we are able to pass on through our daily transactions with our customer base. You know, there are some fuel surcharges. I'd say our people have done a tremendous job at passing those along, but there's been some short-term impact to our margin on program business, where freight was included as part of the original program. At times, there's delays in what we're able to go out and recoup as far as those costs. I'd also add that, you know, the lack of trucks and drivers.

Speaker #6: Most of it, we are able to pass on, through our daily transactions with, with our customer base. you know, there are some fuel surcharges I'd say our people have done a tremendous job of passing those along, but there's been some short-term impact to our margin on program business, where freight was included as part of the original program.

Speaker #6: So at times, there's delays in what we're able to go out and recoup, as far as those costs. And I'd also add that, you know, the lack of trucks and drivers.

Speaker #6: There's been a lack of trucks and drivers due to the tight immigration policies. So that has impacted freights and the availability of trucks as well.

Joanna Barney: There's been a lack of trucks and drivers due to the tight immigration policies, so that has impacted freight and the availability of trucks as well.

Jo Barney: There's been a lack of trucks and drivers due to the tight immigration policies, so that has impacted freight and the availability of trucks as well.

Speaker #5: And Keith, one thing I would add o-on the BMD side, if you think about it, one, one way we can kind of help control that is what we do is every load that goes out of our warehouse, every single day, we have to make sure that we optimize.

Troy Little: Ketan, one thing I'm gonna add on the BMD side, if you think about it, one way we can kind of help control that is what we do is every load that goes out of our warehouse, every single day, we have to make sure that we optimize, and that we're sending out a full truck to spread that freight if possible. We've been working really hard on doing that.

Speaker #5: And then we're setting out a full truck to spread that freight, everything possible. And we've been working really hard on doing that.

Speaker #4: Got it. No, that's, that's helpful perspective. And then just when I think about, the second quarter EBITDA guidance, totally appreciate that it's a, a dynamic environment out there.

Ketan Mamtora: Got it. No, that's that's helpful perspective. Just when I think about the Q2 EBITDA guidance, totally appreciate that it's a dynamic environment out there. As I think about your top end versus the bottom end of the guidance range, can you at a high level talk about what does that that contemplate? Should I think about, let's say your current daily pace, what is, you know, what y'all talked about that gets to the midpoint of the guidance range, let's say in Distribution. Is that the way to think about it?

Speaker #4: But as I think about your top end versus the bottom end of the guidance range, can you at a high level talk about what does that, that contemplate?

Speaker #4: So should I think about, let's say your current daily, pace, what is, you know, what you all talked about, that gets to the midpoint of the guidance range, let's say, in distribution?

Speaker #4: Is that the way to think about it?

Speaker #5: Yeah, so Keith, let me take a shot at that. I'll start with BMD first, and then give you a little color on wood products also.

Kelly Hibbs: Yeah. Ketan, let me take a shot at that. I'll start with BMD first. Then give you a little color on Wood Products also. You kinda hit it in your question, which was, we still have 2 months to go in the quarter. End market demand is pretty uncertain, no doubt. How much of the demand we've seen so far is replenishing the channel versus end market demand, that's a little hard to tell. Certainly the unknowns and the volatility around the cost input. All that being said, that's why we draw a pretty wide range around our EBITDA forecast for both the businesses.

Speaker #5: So, you kind of hit it in your, in your question, which was we still have too much to go in the quarter. End market demand is pretty uncertain.

Speaker #5: No doubt. And, and how much of the demand we've seen so far is replenishing the channel versus end market demand? That's a little hard to tell.

Speaker #5: And then certainly the unknowns and the volatility around the cost inputs. So all that, all that being said, that's why we draw a pretty wide range around our EBITDA forecast for both the businesses.

Speaker #5: but s-specific to BMD, if you look at the guide and if you and if you assume that the sales pace that we spoke to, so far this quarter, if it is sustained, and then our margins are kind of the midpoint of the range that we put out, you know, th-that would get us into kind of the, the midpoint of the range.

Kelly Hibbs: Specific to BMD, if you look at the guide, and if you assume that the sales pace that we spoke to so far this quarter, if it is sustained, and then our margins are kind of the midpoint of the range that we put out, you know, that would get us into kind of the midpoint of the range. It'd get us into the, you know, low seventies, and that would get us back to a really good spot, as I commented, in terms of the healthy improvement or EBITDA margins. That'd get us into the mid-fours in terms of an EBITDA margin. In Wood Products, you know, similar theme in terms of the challenges with forecasting there, especially on the cost input side.

Speaker #5: It'd get us into the, you know, low, low 70s. And that would get us back to a really good spot as I commented in terms of the healthy improvement or EBITDA margins.

Speaker #5: That'd get us into the mid 4s in terms of an EBITDA margin. and wood products, you know, similar theme in terms of the challenges with forecasting there, especially on the cost input side.

Kelly Hibbs: Troy spoke to good order files in EWP, pretty good order files in plywood, but we know how things, particularly in plywood, how quickly things can flip. Again, that's why we purposely put a pretty wide range around our results.

Speaker #5: Troy spoke to good order files in, in EWP, pretty good order files in plywood. But we know how things, particularly in plywood, how quickly things can flip.

Speaker #5: And so, again, that's why we purposely put a pretty wide range, around, around our results.

Speaker #4: Got it. No, that's very helpful. I'll jump back in the queue. Good luck.

Ketan Mamtora: Got it. No, that's very helpful. I'll jump back in the queue. Good luck.

Speaker #5: Thanks, Keith.

Kelly Hibbs: Thanks, Ketan.

Speaker #7: The next question comes from Susan McLaurie from Goldman Sachs. Please go ahead.

Operator 2: The next question comes from Susan Maklari from Goldman Sachs. Please go ahead.

Operator: The next question comes from Susan Maklari from Goldman Sachs. Please go ahead.

Speaker #8: Good morning, everyone. Thanks for taking the questions. My first question is around thinking of the environment that we're in and that increase in macro uncertainty that we've seen.

Susan Maklari: Good morning, everyone. Thanks for taking the questions.

Kelly Hibbs: Morning, Susan.

Susan Maklari: My first question is around thinking of the environment that we're in and that increase in macro uncertainty that we've seen at the end of the Q1. Has that had any impact on the mix you're seeing between sales coming out of the warehouse versus direct? What's the overall sort of read, would you say, of a lot of your customers, and how is that influencing the guide and how we should think about the flow through to results?

Speaker #8: At the end of the first quarter, has that had any impact on the mix you're seeing between sales coming out of the warehouse versus direct?

Speaker #8: What's the overall sort of read, would you say, of a lot of your customers? And how is that influencing the guide and how we should think about the flow-through to results?

Speaker #5: Hey, so this is Jeff. I'll, I'll take a stab at that. What, what we did see in the, in the first quarter, when the commodities started to move, and the prices were so you know, they were down to begin with, we did see people step in and start buying more directs than we've seen in the past few quarters.

Jeff Strom: Hey, Susan, this is Jeff Strom. I'll take a stab at that. What we did see in the Q1 when the commodities started to move and prices were so You know, they were down to begin with. We did see people step in and start buying more direct than we've seen in the past few quarters. There was absolutely a shift to that. There's no doubt about that. As we're moving forward, with the uncertainty that's out there, what that creates most of the time is more reliance on distribution, and we're absolutely seeing that. Our warehouse business continues to be very strong, and it continues to be what people wanna use.

Speaker #5: And there was absolutely a shift to that. There's no doubt about that. But with, as we're moving forward with the uncertainty that's out there, what that creates most of the time is more of a reliance o-on distribution.

Speaker #5: And we're absolutely seeing that. Our warehouse business continues to be very strong and it continues to be what people want to use.

Speaker #8: Okay. That's, that's helpful. And, you know, within General Line, can you talk about what you're seeing from your suppliers just in terms of any competitive dynamics there?

Susan Maklari: Okay. That's helpful. You know, within general line, can you talk about what you're seeing from your suppliers just in terms of any competitive dynamics there? How they're thinking about pricing given the world that we're in, how you're thinking about what that could mean as we think of the next couple of quarters?

Speaker #8: How they're thinking about pricing given the world that we're in? And how you're thinking about what that could mean as we think of the next couple of quarters?

Joanna Barney: Yeah. This is Jo. You know, as far as our suppliers, I guess, and pricing, how they're thinking about that, you know, we saw somewhere in the neighborhood, late in Q1, somewhere in the neighborhood of 25 to 30 price increases. You know, some of those were surcharge driven, so some of those were based on gas rate. But most of them, I would say were based just product price increasing. You know, I think what we're seeing from suppliers is broader product offerings, you know, and as well as starting to understand that there has been some strength in the market that they're pushing into, and they're starting to move their prices accordingly.

Speaker #3: yeah. So this is Joe. So, you know, as far as our suppliers, I guess, and, and pricing, how they're thinking about that, you know, we saw, somewhere in the neighborhood late in Q1, somewhere in the neighborhood of 25 to 30 price increases.

Jo Barney: Yeah. This is Jo. You know, as far as our suppliers, I guess, and pricing, how they're thinking about that, you know, we saw somewhere in the neighborhood, late in Q1, somewhere in the neighborhood of 25 to 30 price increases. You know, some of those were surcharge driven, so some of those were based on gas rate. But most of them, I would say were based just product price increasing. You know, I think what we're seeing from suppliers is broader product offerings, you know, and as well as starting to understand that there has been some strength in the market that they're pushing into, and they're starting to move their prices accordingly.

Speaker #3: you know, some of those were surcharge-driven. So some of those were based on, on gas freight. but most of them, I would say, were based just product price increasing.

Speaker #3: So you know, I think what we're seeing from suppliers is, is broader, broader product offerings. you know, and as well as starting to understand that, there is some have been some strength in the market that they're pushing into.

Speaker #3: And they're starting to move their prices accordingly.

Speaker #8: Okay, that's encouraging. Thank you all for the color, and good luck with the quarter.

Susan Maklari: Okay. That's encouraging. Thank you all for the color, and good luck with the quarter.

Speaker #7: The next question comes from Kurt Ginger from D.A. Davidson. Please go ahead.

Operator 2: The next question comes from Kurt Yinger from D.A. Davidson. Please go ahead.

Operator: The next question comes from Kurt Yinger from D.A. Davidson. Please go ahead.

Speaker #9: Great. Thanks. And good morning, everyone. I, I just wanted to go back to BMD. You know, looking at the volume performance there, even if we kind of strip out an assumption on Holden, looks like pretty flat, which I, I would say is good in this market.

Kurt Yinger: Great. Thanks, good morning, everyone. I just wanted to go back to BMD. You know, looking at the volume performance there, even if we kind of strip out an assumption on hold in, looks like pretty flat, which I would say is good in this market. Can you just talk about whether it's product category or customer initiatives that seem to be bearing fruit there?

Speaker #9: Can you just talk about whether it's product category or, or customer initiatives, that seem to be bearing fruit there?

Speaker #3: Yeah. I, this is Joe. Again, I'll jump in. So I would say it's both. you know, so I, I think the first thing I want to do from, from a, you know, what we're seeing and, and driving out of warehouse versus direct, what we're seeing as far as margins, you know, as a backdrop, we had some margin and return on sale impacts that were either a one-time event or things that we don't expect to be permanent.

Joanna Barney: Yeah. I, Joanna again. I'll jump in. I would say it's both. You know, I think the first thing I wanna do from a, you know, what we're seeing and driving out of warehouse versus direct, what we're seeing as far as margin. You know, as a backdrop, we had some margin and return on sale impacts that were either a one-time event or things that we don't expect to be permanent. To Kelly's point in his prepared remarks, we had 38 days of closures with weather, that, you know, some of that business we recaptured, some of it we lost. The our costs remained fixed, right? There was an impact there. We had the fuel surcharges that we passed through some of them.

Jo Barney: Yeah. I, Joanna again. I'll jump in. I would say it's both. You know, I think the first thing I wanna do from a, you know, what we're seeing and driving out of warehouse versus direct, what we're seeing as far as margin. You know, as a backdrop, we had some margin and return on sale impacts that were either a one-time event or things that we don't expect to be permanent. To Kelly's point in his prepared remarks, we had 38 days of closures with weather, that, you know, some of that business we recaptured, some of it we lost. The our costs remained fixed, right? There was an impact there. We had the fuel surcharges that we passed through some of them.

Speaker #3: So it, to Kelly's points, in, in as prepared remarks, we had 38 days of closures with weather. that, you know, some of that business we recaptured, some of it we lost.

Speaker #3: But the, the our cost remained fixed, right? So we, there was an impact there. We had the fuel surcharges that we passed through some of them.

Joanna Barney: There's some timing that goes on there. There's a margin shift there. As far as our general line products and our initiatives go, you know, we're focused on the growth of our home center special order business, which we grew by double digits, and we continue to build out our door segment, gaining market share there. We're driving top-line revenue. You know, we tied to our door initiative, we pushed into the manufactured housing sector. We saw double-digit growth in Q1. A lot of upside opportunity there. We're making strides with our digital strategy. Our e-commerce business was up 57%.

Speaker #3: but we, there's some timing that goes on there. So we're, there's a margin shift there. but as far as our General Line products and our initiatives go, you know, we are, we're focused on the growth of our home center, special order business, which we grew by double digits.

Jo Barney: There's some timing that goes on there. There's a margin shift there. As far as our general line products and our initiatives go, you know, we're focused on the growth of our home center special order business, which we grew by double digits, and we continue to build out our door segment, gaining market share there. We're driving top-line revenue. You know, we tied to our door initiative, we pushed into the manufactured housing sector. We saw double-digit growth in Q1. A lot of upside opportunity there. We're making strides with our digital strategy. Our e-commerce business was up 57%.

Speaker #3: And we continue to build out our door segments, gaining market share there. We're driving top-line revenue. you know, we tied, tied to our door initiative.

Speaker #3: We pushed into the manufactured housing sector. we saw double-digit growth in Q1. A lot of upside opportunity there. we're making strides with our digital strategy, our e-commerce business was up 57%.

Joanna Barney: Then as far as, you know, commodities, I think that you are gonna continue to see us outperform the market on commodities because we've built out commodity technical systems really that give us early indicators, real-time views into trends, inventory levels, market segments, so that we can move quickly across the entirety of our system in buying and selling. Then you're looking at our commodity volume and footage that was flat to up in Q1, and we actually saw margin expansion in spite of lower pricing. We feel pretty confident that we are expanding our market share in commodities, based on the systems that we've built out, based on the risks that we take in putting inventory on the ground. Risk that's not uneducated risk.

Speaker #3: and then as far as, you know, commodities, I think that you are going to continue to see us outperform the market on commodities. Because we have, we've built out commodity technical systems, really, that give us early indicators, real-time views into trends, inventory levels, market segments.

Jo Barney: Then as far as, you know, commodities, I think that you are gonna continue to see us outperform the market on commodities because we've built out commodity technical systems really that give us early indicators, real-time views into trends, inventory levels, market segments, so that we can move quickly across the entirety of our system in buying and selling. Then you're looking at our commodity volume and footage that was flat to up in Q1, and we actually saw margin expansion in spite of lower pricing. We feel pretty confident that we are expanding our market share in commodities, based on the systems that we've built out, based on the risks that we take in putting inventory on the ground. Risk that's not uneducated risk.

Speaker #3: So that we can move quickly across the entirety of our system in buying and selling. And so then you're looking at our commodity volume and footage that was flat up in Q1.

Speaker #3: And we actually saw margin expansion. In spite of lower pricing. So we feel pretty confident that we are expanding our market share in commodities, based on the systems that we've built out, based on the risks that we take in putting inventory on the ground, risks that's not.

Speaker #3: It's not uneducated risk. You know, it's an educated risk built on years of experience and the expertise of our people. But it has helped us in deflationary pricing environments to hold onto our volume and actually expand our margins.

Joanna Barney: You know, it's an educated risk built on years of experience and the expertise of our people. It has helped us in deflationary pricing environments to hold on to our volume and actually expand our margins.

Jo Barney: You know, it's an educated risk built on years of experience and the expertise of our people. It has helped us in deflationary pricing environments to hold on to our volume and actually expand our margins.

Speaker #9: Okay. That's, that's awesome detail. And it, it sort of dovetails, I, I guess, into my next question on, on the gross margin line. Y Joe, you alluded to some of the fuel surcharges and timing.

Kurt Yinger: Okay. That's, that's awesome detail. It, it sort of dovetails, I guess, into my next question on the gross margin line. Jo, you alluded to some of the fuel surcharges and timing and some of the fixed cost elements. It seems like as we move into the back half, maybe those things will slip and not be so burdensome. I also heard, you know, EWP competition may be increasing and that driving margins lower. I guess, as we move into the back half of the year, is the competitive environment so challenging that it would be tough to get back to kind of that 15% plus gross margin level, or is that still kind of an attainable goal?

Speaker #9: And some of the fixed cost elements. It seems like as we move into the back half, maybe those things will flip and not be so burdensome.

Speaker #9: but I also heard, you know, EWP competition maybe increasing and, and that driving margins lower. So I guess as we move into the back half of the year, is the competitive environment, you know, so challenging that it would be tough to get back to kind of that 15% plus gross margin level?

Speaker #9: Or i-i-is that still kind of an attainable goal?

Speaker #3: I think it's an attainable goal. I would say, you know, I think we characterize the current demand environment of uneven, right? And rate-sensitive. So there's, there's still a lot of opportunities out there.

Joanna Barney: I think it's an attainable goal. I would say, you know, I think we'd characterize the current demand environment as uneven, right, and rate sensitive. There's still a lot of opportunities out there. They're just uneven depending on the geography and region. You know, they're dependent on product category. They vary based on the size and the type of the builder. You know, so it's been sporadic, uneven environment that's likely gonna continue unless single-family housing starts to pick up. I will also say that when we saw interest rates dip below 6%, we saw some strength return to the market pretty quickly. You know, if we're in an environment where rates pull back, if geopolitical tensions ease, you know, BMD could see some improvement just from seasonality as commodity price improvements.

Jo Barney: I think it's an attainable goal. I would say, you know, I think we'd characterize the current demand environment as uneven, right, and rate sensitive. There's still a lot of opportunities out there. They're just uneven depending on the geography and region. You know, they're dependent on product category. They vary based on the size and the type of the builder. You know, so it's been sporadic, uneven environment that's likely gonna continue unless single-family housing starts to pick up. I will also say that when we saw interest rates dip below 6%, we saw some strength return to the market pretty quickly. You know, if we're in an environment where rates pull back, if geopolitical tensions ease, you know, BMD could see some improvement just from seasonality as commodity price improvements.

Speaker #3: they're just uneven depending on the geography and region. You know, they're dependent on product category. they vary based on the size and the type of the builder.

Speaker #3: you know, so it's been sporadic, uneven environment that's likely going to continue unless single-family housing starts to pick up. But I will also say that when we saw interest rates dip below 6%, we saw some strength, return to the market pretty quickly.

Speaker #3: So, you know, if we're in an environment where rates pull back, if geopolitical tensions ease, you know, BMD could see some improvement just from seasonality and commodity price improvements.

Joanna Barney: You know, we have some opportunity there. As far as engineered wood, yes, we're still seeing pricing pressure on engineered wood, although it's abating. We're seeing that starting to trail off. You know, there's been some margin impacts to us across a wide breadth of general line products. We saw year-over-year commodity price deflation. Again, we've offset that price deflation in commodities with margin expansion. We still see opportunities out there. If nothing changes in the market as far as interest rates or tensions easing, we would have a more measured outlook, I think. Some seasonal improvements still, but not a broad-based acceleration of the business.

Speaker #3: You know, so we have some opportunity there. As far as engineered wood, yes, we're still seeing pricing pressure on engineered wood, although it's abating.

Jo Barney: You know, we have some opportunity there. As far as engineered wood, yes, we're still seeing pricing pressure on engineered wood, although it's abating. We're seeing that starting to trail off. You know, there's been some margin impacts to us across a wide breadth of general line products. We saw year-over-year commodity price deflation. Again, we've offset that price deflation in commodities with margin expansion. We still see opportunities out there. If nothing changes in the market as far as interest rates or tensions easing, we would have a more measured outlook, I think. Some seasonal improvements still, but not a broad-based acceleration of the business.

Speaker #3: We're seeing that starting to trail off. You know, there's been some margin impacts to us across a wide breadth of General Line products.

Speaker #3: and then we saw year-over-year commodity price deflation. But again, we've offset that price deflation in commodities with, with margin expansion. So we still see we still see opportunities out there.

Speaker #3: If nothing changes in the market as far as interest rates or tensions easing, then we would have a more measured outlook, I think.

Speaker #3: Some seasonal improvements still, but not a broad-based acceleration of the business.

Speaker #9: Right. Okay. Makes perfect sense. Thank you.

Kurt Yinger: Right. Okay. Makes perfect sense. Thank you.

Speaker #10: The next question comes from George Staffos from Bank of America. Please go ahead.

Operator 2: The next question comes from George Staphos from Bank of America. Please go ahead.

Operator: The next question comes from George Staphos from Bank of America. Please go ahead.

Speaker #11: Hi everyone, good morning. Thanks for taking my questions. A lot were already asked and answered. I guess, first question I had is on costs.

George Staphos: Hi, everyone. Good morning. Thanks for taking my questions. A lot were already asked and answered. I guess first question I had on costs, is there a way that you can give us a ballpark figure for the inflation you've seen in your cost of goods on an annualized basis that you have yet to recover in pricing actions already? Question number 1. Question number 2, really just on plywood, guys. I recognize that you've not yet seen the wood show up from Brazil and South America in a large degree, yet you said there is some that's already shown up. You've seen it in quotes, and it has not had a big effect. Why do you expect it might have a bigger effect? What would some of the factors be, given your experience? Thank you.

Speaker #11: Is there a way that you can give us a ballpark figure for the inflation you've seen in your cost of goods on an annualized basis that you have yet to recover in pricing actions already?

Speaker #11: Question number one. Question number two—really just on plywood, guys. I recognize that you've not yet seen the wood show up from Brazil and South America in, in a large degree.

Speaker #11: Yet you said there is some. That's already shown up. You've seen it in quotes. And it has not had a big effect. Why do you expect it might have a bigger effect?

Speaker #11: what were some of the factors be given your experience? Thank you.

Speaker #12: Yeah. So I guess I'll start on the, the first one, which was trying to put a bit of finer point on some cost input increases.

Kelly Hibbs: Yeah. I guess I'll start on the first one, which was trying to put a bit of finer point on some cost input increases, and I'll speak to that, I guess, more specifically as it relates to Wood Products. In BMD, we're seeing some freight increases.

Speaker #12: And I'll speak to that, I guess, more specifically as it relates to wood products. And then BMD, we're seeing some freight increases for large.

Kelly Hibbs: Thanks, Troy.

Kelly Hibbs: We're largely going to be able to pass those through over time. In Wood Products, the things that Troy Little hit on, you know, resins, it is a big one. If you think about kind of the 3 big items that I would call out in Wood Products cost inputs that are subject to some inflationary increases we are experiencing now that we really didn't see much of all in Q1, between glue, natural gas, and purchased electricity. That is roughly, generally speaking, going to be about 10% of Wood Products cost of sales. To the extent we see, and we have seen, call it 10% increases in some of those key inputs, that will help you kind of give a sense of what the cost impact could be, assuming volumes remain the same.

Speaker #12: They're going to be able to pass those through, over time. In, in wood products, you know, the things that Troy hit on, you know, resins, if you is a big one.

Speaker #12: But if you think about kind of the, the three big, big items that I would call out in wood products, cost inputs that, that are subject to some inflationary increases we are experiencing, now that we really didn't see much of all in the first quarter, between glue, natural gas, and purchased electricity, that is roughly generally speaking going to be about 10% of wood products cost of sales.

Speaker #12: And so, to the extent we see—and we have seen—call it 10% increases in some of those key inputs, that'll help you kind of get a sense of what the cost impact could be, assuming volumes remain the same.

Speaker #12: And then, I guess, on the second question around plywood—Jeff, do you want to take that, and imports?

Kelly Hibbs: I guess on the second question around plywood, Jeff, you wanna take that on imports?

Speaker #13: Yeah. I'll, I'll take one. We, we haven't seen a huge impact because there hasn't been a whole lot that has come in so far.

Troy Little: Yeah. I'll take on. We don't see a huge impact 'cause there has been a whole lot that has come in so far, so that would answer that. Why do we expect there will be an impact? It's supply and demand and it depends on where it comes, what port, is it a big plywood market or not, and how much comes in. Obviously, there's a lot that comes in, and if there's a big price advantage, you know, then obviously it'll grab some share. We've seen that before. It, you know, with what's happening down there's been a delay. With what's happening with ocean transportation and freight coming over, you know, it'll be wait and see when it gets here.

Jeff Strom: Yeah. I'll take on. We don't see a huge impact 'cause there has been a whole lot that has come in so far, so that would answer that. Why do we expect there will be an impact? It's supply and demand and it depends on where it comes, what port, is it a big plywood market or not, and how much comes in. Obviously, there's a lot that comes in, and if there's a big price advantage, you know, then obviously it'll grab some share. We've seen that before. It, you know, with what's happening down there's been a delay. With what's happening with ocean transportation and freight coming over, you know, it'll be wait and see when it gets here.

Speaker #13: So that, that would answer that. And why do we expect there will be an impact? It, it's supply and demand. And what it depends on where it comes, what port.

Speaker #13: Is it a big plywood market or not? And how much comes in? And obviously, there's a lot that comes in. And if there's a big price advantage, you know, then obviously it'll, it'll grab some share.

Speaker #13: And we've seen that before. But it, you know, with, with what's happening down there, it's been a delay with what's happening with ocean transportation and freight coming over, you know, it'll be wait and see when it gets here.

Speaker #10: What are the if I can ask a quick follow-on. What are the, the spreads between current market pricing and what the quotes are coming in on imports?

George Staphos: If I can ask a quick follow-on, what are the spreads between current market pricing and what the quotes are coming in on imports? Can you give us a little bit of what the arbitrage is at this juncture?

Speaker #10: Can you give us a little bit of what the arbitrages are at this juncture?

Speaker #12: Yeah. When it first got here, I, I, I asked that question. And I and I if I remember right, it w it was about a 10% difference between the two.

Troy Little: Yeah. When it first got here, I asked that question. If I remember right, it was about a 10% difference between the two, is what the pricing spread was when it first arrived or what they're quoting.

Speaker #12: It was what the pricing spread was when it first arrived or what they were quoting.

Speaker #10: Okay. Thank you very much. I'll turn it over.

George Staphos: Okay. Thank you very much. I'll turn it over.

Speaker #14: The next question comes from Jeff Stevenson from Loop Capital. Please go ahead.

Operator 2: The next question comes from Jeff Stevenson from Loop Capital. Please go ahead.

Operator: The next question comes from Jeff Stevenson from Loop Capital. Please go ahead.

Speaker #15: Hi, thanks for taking my questions today. How much did restocking ahead of the spring selling season contribute to the improved sequential EWP volumes during the quarter?

Jeff Stevenson: Hi, thanks for taking my questions today. How much did restocking ahead of the spring selling season contribute to the improved sequential EWP volumes during the quarter? Could you provide an update on current EWP channel inventories at this point of the year compared with, you know, both last year when, you know, they were elevated and historical levels?

Speaker #15: And then could you provide an update on current EWP channel inventories at this point of the year compared with, you know, both last year when, you know, they were elevated and historical levels?

Speaker #12: Yeah. Jeff, this is Troy. yeah. I mean, I, undoubtedly the better part of Q1 was probably a, a restocking story. maybe late in the quarter, there was some follow-through.

Troy Little: Yeah, Jeff, it's Troy. Yeah, I mean, undoubtedly the better part of Q1 was probably a restocking story. Maybe late in the quarter there was some follow-through. It's probably some combination of, you know, both those two things. Throughout the quarter our order file grew to, you know, kind of a 2 solid week order file. We've carried that through April and into May. You know, in terms of our side, you know, the order file is strong. I'd say there's still a reliance, I'm sure, on the 2-step distribution. EWP specifically, you know, just talking to our channel partners, they've increased inventory, they're not back up to, you know, say, their high end of their target.

Speaker #12: so it was probably some combination of, you know, both those two things. throughout the quarter, our, our order file grew. to, you know, kind of a two, two solid week order file.

Speaker #12: and then we've carried that through April and into, into May. so, you know, in terms of our side, you know, the order file is strong.

Speaker #12: I'd say there's still a reliance, I'm sure, on the two-step distribution. EWP specifically—you know, just talking to our channel partners, they've increased inventory.

Speaker #12: But they're not back up to, you know, say, their high end of their target. So, they're probably, on average, below the high end of their target for this time.

Troy Little: They're probably on average, below the high end of their target for this time, so still relying on the two-step side.

Speaker #12: So still relying on the on the two-step side.

Speaker #10: Oh, that's very helpful. Thanks, Troy. And then I was wondering if you could provide an update on the new Thorsby line and how we should think about the ramp and production at the facility as we move through the first half of the year.

Jeff Stevenson: That's very helpful. Thanks, Troy. I was wondering if you could provide an update on the new Thorsby line and how we should think about the ramp and production at the facility as we move through the H1 of the year.

Speaker #12: Sure, yeah. Actually, not a lot different than what we talked about last quarter. As planned, right now we're in a phase where we're just testing out and getting our product certified in the various depths and series.

Troy Little: Sure. Yeah, actually not a lot different than what we talked about last quarter. As planned, right now we're in a phase where we're just testing out and getting our products certified in the various depths and series. That's expected to go through Q2. In terms of sellable product, we wouldn't have sellable product until probably beginning of Q3. To a degree, that is capacity that we've got. You know, it obviously a demand issue. To the degree that demand is there, you know, we'll start producing out of Thorsby. To the degree that it's not, we'll be, you know, using that as the throttle.

Speaker #12: That's expected to go through the second quarter. And so, in terms of sellable product, we wouldn't have sellable product until probably the beginning of the third quarter.

Speaker #12: and to a degree, that is capacity that we've got. But, you know, i-i obviously, a demand issue. So, to the degree that demand is there, you know, we'll start producing out of, out of Thorsby, to the degree that it's not, we'll be, you know, using that as the as the throttle.

Speaker #12: So right now, going into Q3, not, not sure what, what, you know, volumes look like. But, I would not necessarily anticipate that being a huge volume, issue right now.

Troy Little: Right now, going into Q3, not sure what, you know, volumes look like. I would not necessarily anticipate that being a huge volume issue right now.

Speaker #10: Okay. Very helpful. Thanks again.

Jeff Stevenson: Okay. Very helpful. Thanks again.

Troy Little: Thanks, Jeff.

Speaker #14: Again, if you have a question, please press star, then one. And our next question comes from Ruben Garner from Benchmark. Please go ahead.

Operator 2: Again, if you have a question, please press star then one. Our next question comes from Reuben Garner from Benchmark. Please go ahead.

Operator: Again, if you have a question, please press star then one. Our next question comes from Reuben Garner from Benchmark. Please go ahead.

Speaker #15: Thank you. Good morning, everyone. maybe just a follow-up on EWP price cost dynamics. I, I think you referenced, an expectation of low single-digit sequential pricing declines.

Reuben Garner: Thank you. Good morning, everyone.

Troy Little: Morning, Reuben.

Reuben Garner: Maybe just a follow-up on EWP price cost dynamics. I think you referenced an expectation of low single-digit sequential pricing declines. Wondering kind of what's driving that? You mentioned a strong order file. You've got some inflationary pressures. You know, is it still just so competitive or supply? You know, Just walk me through the thought there. Is this something that, I know that there can be a lag in those things, so is it from maybe competitiveness, several months ago that's just flowing through now? Why would we see sequential declines when we've got a strong order file and inflationary pressures? Thanks.

Speaker #15: W-wondering kind of what's You've got some inflationary pressures. You know, is it still just so competitive or supply, you know, i-i just walk me through the thought there.

Speaker #15: Is this something that, you know, from I, I know that there can be a lag in those things. So is it from maybe competitiveness, several months ago that's just flowing through now?

Speaker #15: Why—why would we see sequential declines when we've got a strong order file and inflationary pressures? Thanks.

Speaker #12: Yeah. Everyone's Troy. yeah. I mean, it flat to down. so I mean, if, if there's enough chatter out there, that we, we could see continued, erosion just from a standpoint of, of, the, the competitive environment trying to retain business and/or looking for new business.

Troy Little: Yeah, Reuben. It's Troy. Yeah, I mean, flat to down. I mean, if there's enough chatter out there that we could see continued erosion just from a standpoint of the competitive environment, trying to retain business and/or looking for new business, but primarily on the retain the business side. We do have from the standpoint of, you know, the freight cost, the delivered cost of EWP. There is anything that doesn't flow through or get passed down through the channel. There's a little bit of a impact to net sales price on the freight side.

Speaker #12: But primarily on the, retaining business side. And then we do have, from the standpoint of, you know, the, the freight cost, the delivered cost of, EWP, there is anything that doesn't flow through or get passed down through the channel, so there's a little bit of a impact to net sales price and the on the freight side.

Troy Little: That combination may lead to a little bit of erosion, but we're not anticipating at this point a lot, so that's why we have the flat to low single digits.

Speaker #12: and so that combination may, lead to a, a little bit of erosion. But we're not anticipating at this point a lot. So that's why we have the flat to, low single-digit.

Troy Little: That combination may lead to a little bit of erosion, but we're not anticipating at this point a lot, so that's why we have the flat to low single digits.

Speaker #14: Great, thanks. And then, on the BMD side—and Susan might have asked this in her second question, so forgive me—it kind of broke up on me.

Reuben Garner: Great. Thanks. Then, on the BMD side, and Susan might have asked this in her second question, so forgive me. It kind of broke up on me. I think, Kelly, you mentioned margin pressure in general line products. That's not the first time we've heard something like that this earning season. Is there something unique going on there in any specific categories driving that? Then just talk about what the inventory How you guys are thinking about inventory in specifically in that general line category. There's been some fits and starts the last couple, few years, leading to adjustments in the channel. Where does inventory stand today, and how are you thinking about it for this year? Thank you, guys.

Speaker #14: I think Kelly, you mentioned margin pressure in general line, products. That's not the first time we've heard something like that this earnings season. Is there something unique going on there in any specific categories driving that?

Speaker #14: And then just talk about what the inventory ho-how you guys are thinking about inventory in, specifically in that general line, category. There's been s-some fits and starts the last couple few years, leading to adjustments in the channel.

Speaker #14: Whereas inve-inventory stand today, and how are you thinking about it, for this year? Thanks, you guys.

Speaker #16: So I, I would I would tell you that, you know, from a margin compression standpoint, you know, the, the biggest pressure we have seen has been across engineered wood.

Joanna Barney: I would, I would tell you that, you know, from a margin compression standpoint, you know, the biggest pressure we have seen has been across engineered wood. Again, that's abating. You know, the rest of it on general line, we're just seeing small margin impacts across a wide breadth of general line products, mostly market-based, really at the distribution level. Nothing out of normal there. As, you know, as far as the channel inventories, I would actually tell you that the fits and starts that we've seen are starting to normalize a little bit. You know, the channel is lean but relatively stable. You know, the customer purchases have been more consistent than that start stop that we saw last year.

Jo Barney: I would, I would tell you that, you know, from a margin compression standpoint, you know, the biggest pressure we have seen has been across engineered wood. Again, that's abating. You know, the rest of it on general line, we're just seeing small margin impacts across a wide breadth of general line products, mostly market-based, really at the distribution level. Nothing out of normal there. As, you know, as far as the channel inventories, I would actually tell you that the fits and starts that we've seen are starting to normalize a little bit. You know, the channel is lean but relatively stable. You know, the customer purchases have been more consistent than that start stop that we saw last year.

Speaker #16: But again, that's abating. You know, the rest of it on general line—we're just seeing small margin impacts across a wide breadth of general line products.

Speaker #16: Ma-mostly market-based, really, of the distribution level. so, so nothing, out of normal there. and then it's, you know, as far as the channel inventories, I would actually tell you that the fits and starts that we've seen are starting to normalize a little bit.

Speaker #16: you know, the channel is lean. But relatively stable. you know, the customer purchases have been more consistent than that start, start, stop that we saw last year.

Joanna Barney: You know, we've started seeing price increases, right? That from multiple suppliers. While there has been margin pressure, we are also seeing price increases being taken on the general line side by many of our suppliers.

Speaker #16: and, you know, we've started, seeing price increases, right? that from, from multiple suppliers. So while there has been margin pressure, we're also seeing price increases being taken on the general line side by, by many of our suppliers.

Jo Barney: You know, we've started seeing price increases, right? That from multiple suppliers. While there has been margin pressure, we are also seeing price increases being taken on the general line side by many of our suppliers.

Speaker #12: Ruben, I'd just add this a little bit. If you if you think about it, single-family is such a driver for us. And single-family demand right now is very much muted.

Jeff Strom: Reuben, I'd just add to this a little bit. If you think about it, single family is such a driver for us, single family demand right now is very much muted. When it gets like that, everybody's fighting for what's out there. It is hyper-competitive right now on pretty much everything across the board.

Speaker #12: And when it gets like what’s out there. So, it is hyper-competitive right now on pretty much everything across the board.

Speaker #15: Got it. Thank you, guys. And good luck.

Reuben Garner: Got it. Thank you, guys, and good luck.

Speaker #12: Thank you.

Jeff Strom: Thank you.

Speaker #14: As a reminder, if you have a question, please press star, then one. And the next question is a follow-up from Kurt Yinger from DA Davidson.

Operator 2: As a reminder, if you have a question, please press star then one. The next question is a follow-up from Kurt Yinger from D.A. Davidson. Please go ahead.

Operator: As a reminder, if you have a question, please press star then one. The next question is a follow-up from Kurt Yinger from D.A. Davidson. Please go ahead.

Speaker #14: Please go ahead.

Speaker #17: Great, thanks. Troy, have you seen or heard any kind of derivative impact in terms of the EWP price conversations you've had, maybe specifically on floor systems, just given what we've seen in dimensional lumber inflation?

Kurt Yinger: Great. Thanks. Troy, have you seen any or heard any kind of derivative impact in terms of kind of the EWP price conversations you've had, maybe specifically on floor systems, just given what we've seen in dimensional lumber inflation?

Speaker #12: Yeah, nothing—nothing that I'm aware of.

Troy Little: Nothing, nothing that I'm aware of.

Speaker #17: No. We no. I think yeah. I haven't really typically, we as we've talked about before, you really don't 2 by 10 pricing can certainly fluctuate a fair bit.

Kelly Hibbs: No, I think, yeah, I haven't really. Typically, as we've talked about before, Two-by-ten pricing can certainly fluctuate a fair bit, but once you get builders to convert to EWP floor systems, you really don't see them convert back, and I think that continues to be the case. If you're talking about open web truss, you know, obviously, we're not a producer there, but that is a competitive product to I-joist. The cost inputs for those products certainly have to be quite volatile in recent quarters. Again, I think I-joist is certainly maintaining its share today in a good spot. We're happy to see the good sequential volume increase we saw in I-joist.

Speaker #17: But once you get builders to convert to EWP floor systems, you really don't see them convert back. And I think that continues to be the case.

Speaker #17: Now, if you're talking about open web truss, you know, obviously, we're not a producer there. But that is a competitive product. I, Joyce, the, the cost the cost base for those the cost inputs for those products certainly have to be quite volatile in, in recent quarters.

Speaker #17: But again, I think I, Joyce, is, is, is main certainly maintaining its, its share today. And, and a good spot. And we're happy to see the good sequential volume increase we saw in I, Joyce.

Speaker #17: Okay. Got it. Thank you. And, and then, just looking at the outlook, you know, it sounds like the order book is pretty strong. I know that it sounds like Q1 benefited from re some restocking.

Kurt Yinger: Okay. Got it. Thank you. Then, just looking at the outlook, you know, it sounds like the order book is pretty strong. I know that it sounds like Q1 benefited from some restocking, but it doesn't seem like that much of kind of a sequential seasonal lift in EWP volumes, Q2 versus Q1. Is that just related to the restock dynamic or maybe more of an explicit assumption around, you know, some softening in single family as we kind of progress into summer?

Speaker #17: But it, it doesn't seem like that much of kind of a sequential seasonal lift in EWP volumes Q2 versus Q1. is that just related to the restock dynamic?

Speaker #17: Or maybe more, of an explicit assumption around, you know, some softening in single-family as we kind of progress into summer? Yeah. Yeah. Good question, Kurt.

Kelly Hibbs: Yeah. Good question, Kurt. It's a little hard for us to exactly sort out what we saw in the first quarter in terms of was it end market or was it channel restocking? The answer is it was some of both, for sure. I think as we move into second quarter, I think it's, you know, if you read a lot of the transcripts from the home builders, the national home builders in particular, they're talking and they're focused, as they should be, very much on still on the sell side and moving spec inventory and moderating their pace, their starts pace to their sales pace.

Speaker #17: It's a little hard for us to exactly sort out what we saw in the first quarter, in terms of was it in-market or was it channel restocking.

Speaker #17: The answer is it was some of both, for sure. I think as we move into second quarter, I think it's, you know, it if you read a lot of the, the transcripts from the whole builders, the national home builders in particular, they're they, they're talking and they're focused as they should be very much on still on the sell side and moving spec inventory and, and moderating their pace.

Speaker #17: Their starts pace to their to their sales pace. some of them are talking about maybe increasing starts. But I would say more of them seem to be talking about decreasing starts.

Kelly Hibbs: Some of them are talking about maybe increasing starts. I would say more of them seem to be talking about decreasing starts and transitioning a bit more to the build to order because they can, because cycle times have improved. I think that all plays into the narrative. We're really doing our best to try to pick up the demand signal from the home builder channel, which would suggest that not going to see a big seasonal increase here into Q2.

Speaker #17: And transitioning a bit more to the build-to-order because they, they can. Because cycle times have improved. And so I think that all plays into the narrative.

Speaker #17: So we're really doing our best to try to pick up the demand signal from the home builder channel, which would suggest that not gonna see a big seasonal increase here into the second quarter.

Speaker #17: Okay. All right. Appreciate the color. Thank you.

Kurt Yinger: Okay. All right. Appreciate the color. Thank you.

Speaker #14: This concludes our question-and-answer session. I would like to turn the conference back over to Jeff Strom for any closing remarks.

Operator 2: This concludes our question and answer session. I would like to turn the conference back over to Jeff Strom for any closing remarks.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Jeff Strom for any closing remarks.

Speaker #12: Thank you for your continued interest in Boise Cascade. Please be safe and be well. And we look forward to talking to you next quarter.

Jeff Strom: Thank you for your continued interest in Boise Cascade. Please be safe, be well. We look forward to talking to you next quarter. Thank you all.

Speaker #12: Thank y'all.

Operator 2: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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