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Financial report summary
?Risks
- Some of our products are vulnerable to declines in demand due to competing technologies or materials, as well as changes in building code provisions.
- Cybersecurity risks related to the technology used in our operations and other business processes, as well as security breaches of company, customer, employee, and vendor information, could adversely affect our business.
- We depend on third parties for transportation services and limited availability or increases in costs of transportation could adversely affect our business and operations.
- Our strategy includes both organic growth and pursuing acquisitions, which we may be unable to execute efficiently and effectively.
Management Discussion
- ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- Boise Cascade is a large, integrated wood products manufacturer and building materials distributor with widespread operations throughout the United States (U.S.) and one manufacturing facility in Canada. We completed an initial public offering of our common stock on February 11, 2013. We have two reportable segments: (i) Wood Products, which primarily manufactures engineered wood products (EWP) and plywood; and (ii) Building Materials Distribution (BMD), which is a wholesale distributor of building materials. For more information, see Note 3, Revenues, and Note 15, Segment Information, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" and "Item 1. Business" of this Form 10-K. Our products are used in the construction of new residential housing, including single-family, multi-family, and manufactured homes, the repair-and-remodeling of existing housing, the construction of light industrial and commercial buildings, and industrial applications. We have a broad base of customers, which includes a diverse mix of dealers, home improvement centers, leading wholesalers, specialty distributors, and industrial converters. Our Wood Products and BMD segments are integrated from wood fiber procurement through distribution. During 2023, approximately 66% of our Wood Products segment sales, or approximately 78% and 42% of our Wood Product segment's EWP and plywood sales volumes, respectively, were to our BMD segment.
- We recorded income from operations of $624.4 million during the year ended December 31, 2023, compared with $1,157.8 million during the same period in the prior year. In our Wood Products segment, income decreased by $238.1 million to $337.1 million for the year ended December 31, 2023, from $575.2 million in 2022. The decrease in segment income was due primarily to lower plywood and EWP sales prices, as well as lower EWP sales volumes. In addition, segment income was negatively impacted by an increase in depreciation and amortization expense related to the Coastal Plywood acquisition. These decreases were offset partially by lower wood fiber costs and higher plywood sales volumes. In our BMD segment, income decreased $291.3 million to $335.8 million for the year ended December 31, 2023, from $627.1 million for the year ended December 31, 2022, driven by a gross margin decrease of $276.0 million, resulting primarily from gross margin declines on EWP and commodity products and lower sales volumes across all product lines compared with 2022. These changes are discussed further in "Our Operating Results" below.