BCC - Earnings call transcript Q1 2022

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Operator

Good morning. My name is Latonya, and I will be your conference facilitator today. At this time, I would like to welcome everyone Boise Cascade's First Quarter 2022 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. begin, statements you business about anticipated performance. we may this prospects Before financial forward-looking contain the Instructions] I that remind call and [Operator Company's future Company guarantees performance, These update of are duty to not and statements the undertakes no them. future

management's those reflect they today, in call. expressed of or statements a results may are uncertainties. risks implied and these Actual to differ number expectations Although, subject business materially from this

results of discussion SEC. to factors that please your the Cascade's cause Boise results Boise the my It pleasure the the may differ to to actual recent from begin President, Vice conference. Cascade. introduce Treasurer For Senior CFO anticipated, now with of to Hibbs, refer Mr. you may a filings Hibbs, and Kelly is you

Kelly Hibbs

everyone. Latonya, update. would to earnings and welcome you quarter morning Cascade's business call and you, to good Boise like first XXXX I Thank

Strom, of Materials Brown, Joining Products Operations; me CEO; our on Jeff Mike of Jorgensen, today's are Wood our operations. Nate Head our Head call and Distribution Building

Turning the call I statements. information to income and EBITDA. to income EBITDA from turn reconciliations now and regarding point Nate. GAAP to our segment out would appendix includes forward-looking adjusted The segment our over EBITDA X. to will the I Slide net

Nate Jorgensen

tremendous financial operating for after morning Good outstanding start a everyone. is both for Kelly. delivering to Thanks, call of businesses and Thank joining start I XXXX earnings to off want you our today. our on results. X. Slide

up XXXX. from consolidated sales Our billion first the first quarter of quarter X.X XX% a were

to million segments Single In, the quarter. period XXX.X of year's Wood and the driver levels benefited starts continue million quarter first or the focus quarter. from our to product sales sales EBITDA the compared the share for quarter. first sales Wood Building Family improved on XXX.X reported Products quarter sales or strong starts EBITDA compared our year segment sales the same compared Wood primary in plywood to Distribution total realization X.X million Products million of net was volumes to EBITDA compared of income year first in production first for billion $XXX.X million ago to a demand increased and XXX.X prior of comparative last to X%. to in during Products the year. billion U.S. EWP continued the XXXX last in recorded manufacturing Housing quarter. year million XX% $XXX.X housing to EWP share per per XXX Materials quarter segment increased the in response X.X compared net prices Our ago quarter. $X.XX $X.XX on income

While products questions. line favorably of and outlook and during I'll driver come escalating BMDs our were continued margins majority the your prices we quarter, increasing will take results. results outstanding and more walk through BMDs of commodity before back Kelly a across results the financial quarter, key to the product EWP provide be by impacted Kelly? in consistent general detail

Kelly Hibbs

to quarter distribution sales Thank XXX.X are XXX.X million sales Slide I'm you, the X. compared product Wood first including Nate. to in million our segment XXXX. in quarter first on

partially by costs partially XXXX. increased segment The quarter. with from EBITDA million to quarter and sales margin across gross year a million product the was EWP quarter, quarter. due BMD in expenses offset the increase of XXX.X in of costs. segment all margins gross selling improved XX.X by was offset were improvement resulting of million first The XXX.X in million, in reported up EBITDA first EBITDA increased of compared segment Wood manufacturing higher primarily up XXX and margin EBITDA million by plywood lines. reported wood reported to EBITDA The other the EBITDA As and year Nate quarter mentioned in segment billion, substantially from the Products of ago BMD prior prices sales improvement X.X of segment in XXX.X XX% XXX.X distribution from higher was fiber million. driven

Turning sales X%. were our first quarter for volumes up X, LVL to Slide

XXXX. down and files LVL I-joists quarter. extended. Demand strong our quarter While ability for were finished to sales hinder and to X% take move quarter volume first X% effect. with compared goods increases into through be the announced continued Webstock with X% I-joists as XXXX, in continued first during first for also constraints Transportation respectively, transportation fourth and remain continued Inbound compared were order marketplace. inventory for negatively EWP the up quarter previously consistently price to Pricing to I-joists our impacted issues production

expect single actions taken digit We in reflecting quarter increases pricing in second XXXX. XXXX high early sequential price

per our Turning compared the strong net plywood quarter million XXX XX% in X, XX% quarter was first mills veneer first Slide X,XXX Products quarter sales allowing XXX average plywood to to from sales and and Wood was to volume during plywood from first quarter in in well or $XXX XXXX quarter plywood feet us XXXX million prices pricing. feet The operated up first up benefit sequentially.

quarter, As pricing we declined. moved into plywood second

through are first XX% approximately Our below April quarter our realizations average. price

In impact addition, Chester, million plywood and volumes. to commenced a near-term has Carolina volumes negatively veneer production we will approximately expect square at as of South feet our dryer quarter second XXX replace project

quarter I'm first quarter increases same in in the BMD team pace continue has second line ago mitigating pricing now as general we XXXX risk product season. price This first shown XX%, across general in product of margin the marketplace. X.X reported and commodity quarter. up up during a year exposure quarter increased BMD dollars first XXX.X X. remains spring improved on The sales from products. sales sales XX.X% commodity strength the strong gross XXXX BMD was XX%. for quarter volumes and and of declines first lines in EWP we downside Slide quarter with XXX EWP experienced reported benefit to basis XXXX shows also we into points Gross across far quarter stabilization rise The first quarter move hesitancy XX% increased our margin BMD's compared the the percentage by quarter the done in across Slide weeks lines. signs margins XXXX. of by second line great product was building in flat. up April. declines in to for last sales job substantially sales billion lumber Moving sharp gross as followed all the price as million the XX% from By Pricing improved X.X% line product stability has in EBITDA slide from year, from the XX% from BMD's increased by sales and X. resulting quarter margin beginning driven XX% the recent thus created were to price generated were

index. similar one composite patterns see random panel Turning to we, the Slide for pricing X, lengths can

accrued liabilities valuations. segments We data made was expect excluding cash. payable the on during as increased down broken our BMD million cash increase working compensation receivables partially capital. future The accounts The increased inventories product driven for elements a interested first accrued occurred information Net exhibit in driven payouts On be segment hire both use XXX.X statistical representing the working due side the rebates our offset employee X-K accounts in increase inventory Slide during March continue to incentive of labor The XX, income interest inventory receivable tax payable we volatile, uncertainties. items the of increased with in in out XXXX. strong commodity seasonal quarter, by particularly primarily a set challenges by those and and detail. to meaningful have pricing with in accounts has influence ongoing by was and capital increased quarter. filed XX.X sales and the and supply to will having by Inventories transportation key

with quarter Turning We to of cash. XX. Slide XXX million finished first

at total outstanding approximately line. X.X billion, was at million XX, and availability March debt of March available which liquidity our cash committed bank under reflects had XXX Our our XXXX. We XXst

capital Chester timing an construction to to on purchases range South Included and expenditures have dryer to influence Kentucky approximately complete and Carolina spending capital expect Minnesota Ohio, expansions funding million is organic and XXXX veneer a We XXX engineering million. in plant. and in to in of XXX our availability expected is and spending. equipment Availability new our XXXX of resources and at total plywood

rate tax is between expected effective to XX% Our and XX%. be

Board estimate approved share also dividend estimated a between $X.XX remitting $XXX our per payments as of XXXX to sheet support opportunistic tax XXXX per remains XXXX. shortly. After of payment of the to internal XXth income tax We for $XXX Nate our record supplemental million quarter initiatives $X.XX million and during and as on Yesterday, as growth share income. growth payable June speak payments a dividend well on quarterly on and our for more Xst. move of payments, we previously avenues to will well-positioned balance through stockholders June acquisitions, mentioned second dividends,

we opportunities in past, return mechanisms to cash our if we our of cash have the As shareholders. to ahead exceeds the demonstrated will utilize us,

while appropriate outlook. to returns objective Our our grow on over our capital. it will business generating discuss I to overarching remains Nate, successfully to business, shareholder turn back

Nate Jorgensen

demand practices Thanks, XX. the the supported U.S. favorable, number by Slide be continuation in residential of for demographics The many on continues by work-from-home environment to Kelly. and new in I'm economy. construction

U.S. in strong at Chip housing demand for million. XXXX X.XX to remain Blue expect We April with starts Consensus

home existing availability and and will age the construction a for continue repair and and In addition, U.S. residential stock inventory provide limited housing spending. backdrop favorable new of to remodel

and backlogs, we supply-induced to labor that current residential construction strong Although, forecasted reporting on and the home times shortages of national build support demographics continue U.S. may activity are housing builders starts, and activity. limit extend near-term level constraints believe many

with work its its also The our organic projects will and continues expansion in out progressing capacity of to we in a a These of of existing continues support solid Kentucky; Minnesota. system and high Ohio; opportunities market a for materials buyers that affected wage share to is additional to to to and as steady Walton, In construction confidence, of continues quarter. growth, growth, our Chester includes BMD we and demand construction, prospective the to well our as momentum be factors. activity access cost to continue financing enjoy economic Wood impact and support strong and to pricing execute early production suppliers. BMD and customers team and the fluid upcoming as EWP. with and veneer new completion we organic Marion, BMD home Products, of In focus and build repair of pipeline our projects execution Capital consumer growth and pace in navigate add markets, Lakeville, quarters. in building addition, remodeling well level in may project our will expect projects by of EWP conditions. housing the on residential at affordability, which dryer continue growth other third

We second extraordinary commodity we we summer. and of quarter, and expect comparative continued categories EWP expect with product pricing, another but remain prices. general line capture our again quarter results when deliver manage challenging, last opportunities The year's impacts and firm to fully effectively fluctuating in confident make results solid we speak will our upcoming will the associated

will our shareholders. customers, suppliers, Our financial our well-positioned and company and remains we the to we strength communities sure and use operating of continue to incredibly make benefit

Our flexibility or balance continue sheet organic of us opportunities. provides our growth M&A further to pursuit great

welcome Boise open Lastly, our us time. in possible. and customer mindset want today to whose the to Cascade. questions attitude please continued you gratitude We our joining to I and make Thank for lines? would you continues your Latonya, can-do express and would at associates, my this results phone support interest any tremendous focused

Operator

Instructions] first question comes Mark from Wilde Montreal. [Operator of Bank Our of

Your line open. is

Mark Wilde

from is was constraints the EWP sounds It But be stock goes case. just your at But unpack very that else would industry Webstock. just helpful. us anything good it is in looking morning, some I given unpunished fact looking No was allocation surprising shipments. Nate, the this the seems and strong? deed just decline like be wondered It you could of me, kind it that demand at and to the that's if that quarter. help and to on of

Nate Jorgensen

really it to let remains strong signal that demand Mike, your Mark, comments the on you your to up and the challenge the through. of that? Mike side including for point, kind just supply point, Mike me consistent. And Brown. Yes, additional was tee But team But logistics to want and work steady,

Mike Brown

more and the I nice We have to more, Yes, in comments. to if get certainly out prepared pointed as liked remarks nearly made sold think able been would and have Kelly obviously we'd of have Webstock the aware, all border. issues there were for. And raw that been the comes materials you're sure from use we looking as I'm that logistical The significant north Canada. we

of hope that was far a future the will question distant And too resolved. certainly not really Webstock. about be situation that So availability we in

Mark Wilde

that. like to company I more follow It than It on of kind cover. any might just almost seems

of over marker of out You know us that's point? a just issues Because it guys actually related or kind wasn't I you release? this that's that labor Can six proving? COVID called have really quarters? wrestled how with the some it's if seven doing give last So sense something your in don't you at

Mike Brown

interesting So, it's quarter. an

was January a So month activity, want then, in better. COVID actually terms us terrible to markedly But things call you for related that. if have it of got since

now, at to certainly say lowest but the regional updates is when no longer due The almost and look of our COVID its still each is have operations, the we the probably managers. zero. look I wouldn't years that two of at in say I'd But So COVID last that number at we here. absentees weekly from some,

it maybe a certainly, we terms the improvement put years in ago. side that process seen in COVID things. of was we've almost two So place the marked But of

So, that's we why didn't call out. it really

Mark Wilde

And year. if where granularity, of the or Kelly CapEx both wondered more this us a then going little are I could in kind segments you give dollars Nate,

the year company? became that you're you that number public pointing is you've since CapEx probably had biggest to think I the a that

Nate Jorgensen

we're you the sure XX up to the wrong for Mark, for between X highlights correct But million to early that's given big we got a right XXX here. would you'll support going as the, normal little few supply or aspirational is about. to and Southeast in and fair. give We've efficient I me supply veneer tell XXX year this probably dryer bit Products, targeting to year also we get XXX notice this quarter. get that Wood probably third I'm we're so bit million spent and and have pretty functional, the Mike you're you a Yes, to range And the and of that work talked got make chain about on probably that's talked the we've in a fair can challenges you a we we've if segments that in Breaking going and two Chester system. about, our secure there

continue Alexandria at Florien projects and work, dryer our few things that to there. Oakdale some improve So around infrastructure, a late highlights then some controls to and

that Ohio BMD Products. organic on greenfield Kentucky, the the then so as and then hit in you that the, broader really hit And hit know, then of highlights and so, comments, Wood in in that's we we the, market. the probably Kentucky brownfield our Cincinnati, XX working, our on in And part our Marion on three role our expansions we're

system. would has well, for XX of then, year as those this probably across you and a we're So, will get hyster and amount come if to combined, purchased system, million about all locations to quickly those three that But the we impact to going forget as spending our we're in this some good to around like. that spent. pretty that's and rolling we us stock are probably capital looking probably or sizable probably get so that so or across active, at inflation year. hoping of XX year trailers, million on spent related not projects think trucks and XX this that we're got can't our our And lastly, a then that's and get And number hoping as we've

how that's I Mark. summarize you, it So, for

Mark Wilde

for more one the you either on Nate. side Okay, or just capital

specific where you've of shops have you I curious, with and kind more you've and few expanding And other that unique added that sort want I'm been, places little of just talked the line. strategy about your you're You particularly of roll and site window door a these door to comfortable start window product shops enough like aggressively? are you to a out think

Nate Jorgensen

Nate. it's Mark, one. take that I'll Yes, let me

millwork new opportunities of other business for business. like terms platform. we've to two Texas we I continue that we and side that door, locations in to the the there, with and grown specifically -- look in things, we of grow Obviously, think, that our

So right conversation we've is our part got be our forward. other story And customers that'll my BMD growth to the and to continue level support of suppliers and across view an think important markets. advance from both of moving that I that

So, that yes, is we main of growth the our plan had years. part next story over as the and of couple

Mark Wilde

where going start of kind expect be And it housing you up then to activity, first, would for the rates mortgage or able see me. slow last to Nate? If this one detect to

Nate Jorgensen

pressures we'll sure demand environment recognize looks appropriate. money on homes. But we think what's And longer-term, my some recessionary Those monitoring have might us short-term. that demand as and also monitor. what close good out our think the remodel. here understand terms repair money adjust in probably to parts that be community, you there's obviously, Long-term, we the continue looks a centered the at what there. the and I very of will and know, and relationships of but of fundamentals, I think things signal I but going it's about I we to levels, we of privilege be will be industry of in unsold new demand to on only to also customers Mark, make couple that But for builder important in and front like expectation we'll feel closely the the inventory, with, have is stay and about, spots, me that cost the have we of there also are not good and the direct We'll centered Yes, is, of terms like. existing be in are this feel signals and inventory think looking both focused what's maybe happening cost really

Operator

[Mayo And of next question Sachs. our comes from Goldman Cory]

is line open. Your

Nate Jorgensen

morning. Good

Susan Maklari

Good is, morning, mean I know. don't Susan she Maklari? Maybe did

Nate Jorgensen

ahead. Su, morning, that is the Good we expected. Go name

Susan Maklari

Here about her. morning, that. I Well, good good on we go. a I'm sorry congrats and misheard I'm quarter. sorry. everyone

cross I to demand of just more that when was it kind things of thinking bigger it bit think some my summer caused if year, on it to seems of is obviously is picture. obviously the look first and as about feels ground environment a supply this the come this disciplined, a even market Last side materials. EWP question the on the extent, out are we exceptionally tight, building DIY perhaps sort And prices sort down.

And as this summer, about basis of in to to some of even are half landscape supporting get volumes and so, overall maybe sort continue we of we move how ability the rise the thinking you on year? and relative the see pricing as to the a those back

Nate Jorgensen

Yes, It's Susan. and fill any start morning. then maybe the Nate. ask team to I'll blanks. Good

signal people that, market spring demand in think climb terms again, sense. sure also good, risk expecting think I the reflects in we point, But focused I demand look the to And and that of as are what as people I more, now think feels third marketplace last but year, of risk somewhat is I think on equation makes in at on overall measured your there's the I versus are the quarter but think kind and took description, reward housing the making whether right reward. the are the environment very season. of steady, place the we we as consistent, discipline to

those the be customers on in we well-positioned And and think think through of really wholesale, bit course of dependence And with, BMD we marketplace. try as even and frankly people really know think there'll XXXX. matches products and our who do. go on is our perhaps more a navigate up to are what two that'll theme the and services, support changes team as a that so, I key distribution they, I well Jeff some kind to Obviously, manage as step I risk they be, again we of I range a potential

part feel we of second overall, go things the market, where quarter the third risk as latter So that and good we about into reward feel again And again, are and see quarter. again, at. managing we

Susan Maklari

Yes.

And side, guess, the about color. inflation are bigger been next distribution get the than the on I housing, do your think but I think do turn into just, of passing is has just about further about year. those out, sustainability we in of of do do if get put you today? some through through? moving How and some you we guess, Okay. a as the think as that expected when we manufacturers channel That's especially pricing the stickiness helpful of do the sort pricing even general in of EWP that arm, that slowdown you through, the how think things

Nate Jorgensen

as and Jeff I'll And jump in well. here Kelly and Mike Yes, can start. then

I at very in allocation. supply and obviously demand products demand in and think in categories the look terms And think we and under things as in terms we tensioned to balance. that comes pricing I are of remain and today, several some service essentially supply down of

would equation be in need be that -- for adjustment supply to there probably So, or on change. demand reasonable to a increase

I and there products to great on still a purchase is those desire think product. services, marketplace

don't at kind items. of short-term so least And see any of we any on those hesitancy,

I in how that businesses think, sort if positioned compete and to of environment. side, demand of I disruption on kind our love as some organization see we the we,

a resources conditions more us those gain share take to as a the result. the the advantage We market and bit talent, think, demand grow steady have, lower I appropriate. supply capability little of and as overall maybe to allow and Should environment

position. carefully. we of Again, that side something in terms to continue settled it's how of an we to demand things have again, So, see do terms things. grow perhaps play to down opportunity we're our the offense watching again, But and in work of pivot

Susan Maklari

and outlook capital doing about or you for when let's night the little you some allocation capital interest Nate. which should color business, is along in shareholder about supplemental at more just a think one general? in, you buybacks? how that's talk do quarterly dividend. just about last is dividend think the And returns bit announced Okay, your the all allocation? we Can there And squeeze great Or any then with

Kelly Hibbs

Kelly. is This

grow very in in script our number opportunities future through our investing we and So is whether times and more is think balance foremost, BMD obviously the fruition. questions we'll you've that are look about there as organic that to We at that then specific pipeline supplemental discount. same of repurchases. in a an us dividend business all then us. we organic into projects there's as to have. levers your those speak modest, share bounce and then capital first it, program share And opportunistic we how dividends. about And buy in we've repurchases to the terms expanded And return we'll signaled much other heard of up meaningful a we that's and that get ourselves. what's further to want for to or the then that position And many is we to how we that spoken come M&A like are cycle. against those look to view that cash the any two buy We And to, it. sheet hope you've that our more like keep speak heard we've and quarterly sustainable that After our do and want

this this supplemental the the to continues and we, the dividend a cadence around. conversation time board at And we've of point, so elected with do

Susan Maklari

year, it's it but sort supplement through. in to reflects the see first we're good of assume I the And I the mean still the your only outlook. competence, obviously, half coming in of

Kelly Hibbs

of our really sheet when about for and for balance we good we sure. feel Sure. about things are in XXXX, the confident good And really the pipeline for some BMD then

Operator

question comes from And Yinger Davidson. A. our Kurt D. next of

Your line is open.

Kurt Yinger

many QX price will then about implemented. the a just can and bit of files on talk where volume are little about increases of wanting order could you side I on EWP stand little out to bit level until the fully it you the you hoping there? quarters visibility currently and And think a how be start kind talk second,

Nate Jorgensen

still So can talking the what underneath we they're sell I files make second assuming get wheels first. you're specific can part order, EWP, I'll it. can and We we think Order extended. take

early pricing, we side that's sequentially second that the compared if realization, been would a So, with different the increase this demand you announced. On few, pricing differ will, XX% strong. I is The in increase was first. referenced little than window bit kind in to mechanisms announcements. quarter shorter say that price previous and I've terms of that time it of that the has XXXX

of expect that, so, digits, that two well point. pretty we each realized future after single everything And And then next barring sequential the quarters. at we think, got we've high any increases,

Kurt Yinger

recently? product in is other line as home And any or kind changes well? I the kind at turned you And of different across saw what then, of been of then, bit the half Has a I month general that a level, specific correction of demand categories and lived high guess a and consistent short force BMD cited more with is side. the so over talk was hoping customer could around that cohorts? big And driving commodity prices. in maybe in terms little a notable you phenomena demand as patterns on center the or of kinds kind the last

Jeff Strom

from tell talk I everything. bit a the think, there Jeff. side the goes is at all. you kind professional all products. little little break And I'd has It's absolutely then for It it, we remodeler where that when It this the about very and of do say it where strong seeing a then we prices absolutely across And abated through demand to center, down be yourselfers them you the price we're corrected. bit. strong seem way, have that ask slowed up back has but things that it corrected, ticked been up is those as remained what hasn't Kurt, demand the on when is. to home you pick business

Kurt Yinger

that type it. year-over-year? kind same to still commodities categories other of mostly you're significantly pullback And seeing pricing is guess, Got is isolated I pretty that that of that sensitivity price not up just and

Jeff Strom

thing Yes, no, the it's particularly. to to the the levels got side the and did similar and when definitely it just same they been very year this hit do commodities last yourselfers year for on wall the the off commodity it was do

Kurt Yinger

And after third-party Is you sounds in Scotch the that terms supply the like of rebuild kind veneer or is some complete relief that could guys of year. then fire mill the provide last something it not really? that

Mike Brown

up during running morning, with the had Good we before less to and production folks very finished. levels you the information end more Scotch is fire. pretty assist green standing it's I at actually have able Kurt, project that the have green veneer. supplying relationship of correct, our Scotch Mike. They're a were agile, long them the are is to much that Yes, or some the the close they by with rebuild We phase and

we veneer for help certainly of it's see from we veneer themselves sending increase veneer a company. the a So in them it's the the more supply increase will more veneer or peel a up of the tremendous major significant from that that will little us. grand Even Scotch the bit facilities of availability not and plywood swapping but they one it won't a ends running, though were our of in but to

Kurt Yinger

maybe a deals you and focus and with just Could possibility about the and kind of putting last And M&A with to M&A specifically. maybe on is some just whether talk areas year. work allocation cash think then, there one of my strategic capital priorities you this just

Nate Jorgensen

Kurt. that It's take I'll me, Yes, Nate, let one.

our I we of that's will has do I Wood opportunities part important Products continue veneer specifically are centered an been think, EWP forward. And grow are our we on, we who our at capabilities? think we part, going we been to be and franchise, still as important how and look obviously

in currently we and want to that platform to place. strengthen do we build have to again continue we the there at continue capabilities upon look So how our

that that the opportunity position to long-term Products, our But So continue look that and is like that I opportunity for to important maybe of terms moving in continue more in does we an forward. be where probably mass say, would of better behind what look what within remains something us maybe and opportunity. might the fit at understand Wood our that around in work timber, opportunity that's a opportunity that we industry.

around continued franchise, a be little service bit important finally, and is as market and get is And move a into to examples it doing circle we how I Mark the have to capabilities for is our several remains be grow back terms maybe how do to in in BMD part for of capital in that to as our capacity is, we are on the over we going supporting. opportunity then we down important us years the question business, growing For last our just serve and three well distance move And our our as Probably closer think on on our probably are our have from One broken as been and and of BMD, we support today pieces. an just existing about element that vendors we markets really think that we second couple that and serve, product work our and of growth there forward. and something that footprint. growing support mix, to mill door we an BMD shop expanding had we presence forward. of but increase

three that clarity components Products key Wood described in need work have, good BMD. I and we really we what again, are on both as levers again, the well-positioned be probably within those financially would across those be to to And earlier, think BMD. working and we growth And focus that opportunities. the So, we are

Operator

question And from Garner of comes our Benchmark. next Reuben

Your line is open.

Reuben Garner

you with the remarks, me. here kind Excuse that accounting any of the mentioned think in second you margins I A how questions up could. guess I kind you your everybody. of commodity first, talk pretty business if I way on correction? Thanks prepared can an give recently held well gross couple BMD, the where Any been quarter-to-date quarter the you could correction. in idea on us for numbers Can that? about, put

Nate Jorgensen

Sure. Yes. Good question Good Reuben. morning.

for a the of maybe of our margins EWP reminder had margin with majority let of start about general We across if bit a will, see prices So think QX. kind and the margins. a and escalating good really continue quarter, It's trifecta, of really, you gross you product quarter commodity we when me line. to of growth in little our

So margin. really the we gross that the us had XX% to got trifecta

the doing far okay, So us, your so how second are you then in quarter. about, tell question

here probably goodness get decline, the really inventory. bit third as steepness first duration consistent it's with we became a quarter. pace in And weeks nothing of the margin sales of Our is And we little squeeze a decline quarter, this, general ago, for quarter, in as it's that the strong. getting that the stayed experienced is very has saw, and in remains media well like line in April? of then mitigating if second of impacts Yes, and year nothing we've it really several we've as you high And And of like essentially here a job done caused found spot But managing commodities. some And escalation cost there. negative we've good flat in April kind is that the commodities. last margin remember, through we've the of absolutely. worked

to third won't I would you would much they through much, I specific those tell quarter and than you give but tell year are margins So, year gross a quarter. you, our April closer I number, to are ago, second

Reuben Garner

to or BMD, very Within versus by how grow, you are sales you volume? Can to driven points BMD is allowing talk top increasingly to categories staying general about you of grow price that product were difficult allowing to us of growth line of again. on And fast strong with to any out much what that's continue call comps? then the XX guys specific that guys

Jeff Strom

that it. situation the selling product difficult there. volume XXX% about we growth know supply that in we can And been no if get on a lack the line not that we're price, line think isn't then there how of On grow you growth the we driven there's it is on general it, is, right. growth, the has and If can

Now, let's of It's on across everything. board the still up. tension kind

Reuben Garner

to I standpoint. if continues BMD faster from sell your grow distribution? runway own or than more think, do much wood How to manufacturing last or to internally me business one, a more then in within And EWP the to looks faster to engineered grow I one be sneak could business your continuing more through you have there

Nate Jorgensen

that This may I'll take one.

terms in remains the I overall think allocation. category, under EWP it obviously, of

described continue. And so again, as earlier, to scenario we that expect we've

of in that when allocation. tried What it by to A footprint when our and comps to sold independent all look is the of EWP terms to at a comes of that product you BMD relationship, terms at the is of compared external, that predictable consumption third party internal terms the bit think consistent, of our we so look you when external distribution I third-party distribution. change as internal very I be and to suspect fair and is of relationships, in equation. in part

that view contributing would be about again, probably that think of we to of distribution. of kind as bit versus a opposed year to So last external material different into internal a channel difference, a change how take that's

Reuben Garner

sorry, but one I I could. I want to one, said last And one and small if speak more

the So plywood if I volume have provide that sources guess one numbers, means been and that's Can a off? That Was will using you helpful? the for any just growth here. anything quarter of correct for be about was more unique I more there? quarter focus valuable or you, internally valuable the first for a veneer color can know while I first a the

Mike Brown

Reuben, Yes. Mike. it's

up rounded feet think the I of plywood. number So, with XXX million was

was that other that you more quarters had look significantly XXXX, back we were XXX, If XXX. around several one XXX. than that quarter right And at was

quarter, the you of sometimes to general depends a a plywood run, we less, as can how sort sometimes as no because a weren't we structural into don't of trying run our there's to imagine. we're if So, XXX rule million around feet thumb, sort tend bit bit plywood doing business, change way just we fiber business deliberately way. that each more, of run of put the EWP we any to But compared additional

those bit as compared to the was XXX of think, promise quarter, of different, series more events correctly, I example, of you. that us making a I which sort was firewood for led so just structurally one remember I So to, it prior nothing

Operator

And of Staphos our from America. George question with Bank comes next

open. Your line is

George Staphos

can XXX know like, your the obviously Alex, XQ kind probably year both EWP running there? done talked through key the that Chester ply. of veneer 'XX Chester what the do looking of EWP on since are you quarter. What production about guess until take and about to Nice add will in relatedly an to three In you off possible, you imply, I bit early want won't annualized we production you happen. wanted you granular, rest that basis have and beyond? but be of on and to project expect little broad should you or if hit talked growth? won't the I does see to at you terms better if to And Florien, will a strokes the project. you If be at you'd close

Mike Brown

Okay, appropriate, I'll start and of chip as course will others in George.

me with start let Chester. So

small the so Chester very dryer. Okay, project at is a

quarter. We dryers. And out service of dryers is one the have three the be for will like smallest there effectively, it of

of as total out, much very not on because weeks is down things he three size total that to the impact that be sort like meal fun, this lose in for that, So has because the that scheme actually dryer something whole Kelly this production production, of else a veneer of Chester, because took bit will project. sort gross forget of the at be pointed if don't of XX going our million But the right. quarter boiler will a we had down did we we feet

So the month only one of run will mill during April, for like the effectively week.

significant will we our that XXX XXX will volume have Kelly's so in impact compared comment saw lines. QX. that Okay, a along more QX should like and to in think expect plywood was more that the I We more be that

account. And that so, that's all into taking stuff

more on This is, into which but we call in not strip some mostly make mostly run our to, more not plywood, a impact EWP? produce run in we we unfortunately reality relates this EWP. veneer, it will that The goes ability always significant actually respects dryer through As no. particular, veneer into to

though doesn't lift a new stress from even is not total dryer. give this project. in a significant lift, it So, huge a it'll rated There production us veneer be

upside them. to future, have it there now dryer small about because say, the asked complete. years would will an because ever do some are been thinking find you of the about for And to ongoing potentially of ordered should I away number years. has we That's they we which in another You we have if mostly, able chlorine, replacing, about we a we that past set two if be now projects

do particularly sort I the nothing challenge in again, add some where I veneer that heard on at production as see been that, that from the the challenging of step-up prices internally-generated times, me outside buy has high. Northwest and very several would least recent veneer, of you we have log in EWP quarters are a say, is that, So significant Pacific is

suppliers very any external declined. the small Scotch a potential veneer a we bit completed, is really and buy sort will But of has additional And mentioned being available. availability some with little of well, little -- like as as result, And green veneer to a of challenged. be third-party project bit, increase, the bit this earlier, so, been veneer I have maybe And scheme south there things, as in in of end a of of the significance. nothing a

George Staphos

basically I the your out the mean, of you produce X%, if terms right produce should right going I to just number we assume with? the know that's But could limit I we would that be creep you ability couple over productivity see to in So, the of and of what look hit mean, don't X%, number, lines around be as the what next market basically the and Mike, be. is would years,

Mike Brown

I'd like we get year, that veneer we could people days guess need all George. of that for all the if the the we answer question I We this, all of could regularly and So, get the to of to need used in the more have be the total. That's produce capacity, we sort period number time. might about we now we our able for current installed X% some that fill believe,

days your that that's And point previously made nameplate just of I to trying obviously crank all comment to are the up can meet sort we of are, challenges possibly do. and the the our the get allow on sort productivity. some what to can find capacity? we So, veneer we would around, I around to external will production, all us people question

great a productivity really of So blood the go time at than you out squeezed look that most about centers, of of the our if of back the have more decade, recession, stone. if machine we the you sort of

improved our centers of the tremendously because have really really, folks. work really, of Our machine

we to So, we it's point parts, won't not to because on productivity percentage working might very by be your some are we point, a get get bit It's things there. like -- point but low more able it it's, turning some and X% little increases. changing or out here, just points additional

George Staphos

maybe frame talk of any this therefore, now? expect head appreciate to really And have too allowing there, build continued not lean, the about year I a you continued inventory you with you make it therefore wind what in is Are markets to and doing. were right inventories but was are in seeing chain up they're sense? how and little seeing inventories the buyers From do they that broad Can you sort and point, would There that very vantage prices a and which way. the that were your low, given a in Mike. stocking inventory bit so rundown inventories narrative little been tension you that where most this lower, Understood, where high good bit of Canada, a destocking the would pricing tension ultimately standard or question? up you see

Jeff Strom

in work, issue. is And say, strictly tough this lean. they've if the think inventories allocated the to just all the general overall in the get general EWP you believe and transportation been Jeff. general, line mill George, even about I that I'd

of lean. So that it is definitely piece

reward seen and as there from were waiting we've commodity risk demand the definitely where that to buy to will numbers looking the a with people warehouse. people side, our now, out still and of be comes tell you correction. out in. that On for back that were, the lean seem are I right Again,

if numbers if significant stopped, still where at the number. it's So you redirected, and there's time still this look

price and is now, no there So risk where right there look at we're we out wise.

George Staphos

To over. turn last ones on capital allocation it and I'll

CapEx allocating it's you're really we're what But you predict, that. the the do you to need tough know for to and way dividend, supplemental XXX, regular to year, with question excess asking not with you see congratulations to capital. the the factors the to back XXX going this of would play in I again, consider into So rates, come even have these at cash. you're of another And because to to even supplemental

that thoughts would to timber you other update wise there What wise, willing whether happen you'd And time my other some And way consider, potential are be M&A? mass question, benefit somehow is recognize anybody you consideration projects, to about on consider could you would us as I'll about, another in things get and that other any you it think with such supplemental? turn So would which that credit your then in to and partner be to but people around no more CLT, over, the longer recognizing be area? growth from partner do? to turn, driving that seems getting whole that how able terms credit capital might concept, an in applying use of with And do into once there? cut harvesting study the people's to mass you down ESG also business? in the was you how It deferral, timber, interest what it's credits of in and or you for put a that need

Jeff Strom

we've I about still operational things projects working the things terms consider inbound hit in line you, we a terms part then first is of about number the capital that we lot a sight of of supplemental And activity just have pretty of another think alluded of want in around of lot at. allocation, also. of might, in a to looking particular question to and would talked the on pipeline there's terms we're organic BMD take you your then, performance. and in tell And XXXX I'll of on So certainly active and on again, the more when as dividend. we in

end the and and guess flexible repurchase. feel fruition, quarter, than of events and end turn of the over kind that of the I have don't organic more conversation to getting then year. things roll we'll stay it the up patience to of CLT around we if fourth Mike cash M&A like appropriate some So, or third and beginning again out with we and stock see come address the to or towards want And or third, how those timber. mass we we the have I'll dividend to Nate and board supplemental the

Mike Brown

doing on George question. thing We're first the that already. Yes, actually partnering

sort of it's People the CLT folks the name to obviously with gentleman talk together that working material we're the of years. involved space moment a these three supply put lot a Dennis partnering the that much behind So, we been able else. of to on on we have by already projects of way a of traditionally of raw don't this But on has for because market. projects. are Bott our of into EWP. materials in out at produce We different like that we going put third the scenes there about in our can not now as material to group situation a anything sorts small a own CLT we of as in allocated with parties are number But

closely. that it. and look general continue then statement, we to very, we will in are if will presents scale, And we a there doing So an do as at that itself it very is opportunity certainly that very, larger

question, credit part question, your that I was and item how of the fits general. into second carbon around believe in ESG The

George Staphos

be the as some could somehow, that of road a from and was you bit you are and business quite benefit the to would that honest Yes to it? here, down but grow somehow I spitballing, value to use the you with you? terms capital in little degree, in and hopefully how demand how partner you apply stimulate ultimately that

Mike Brown

Okay.

would things opposed this do relates sort mass view an is it's personal thing will could side to a answer mass to this be core your as fully you timber, bit as through it my on timber. a So but thought carbon a become credit over why of of But you, not may a component it the like of add-on the totally question, view to time.

can again, related that be find if the produce some credit because we develop upside products other falls put of either mass traditional comes, new partner or our of folks, way premium So to those may issue. an we there timber carbon with to that and use into additional products that a can that

all trying looks I think we're to what find of days in pretty like. that early

So gained sure when it what might I'm look like. and quite you might not that much it be how I'm to and tell is

future and going say and but to to we'll be from my a part that's how I'm bets So my the the timber hedge somewhat of opinion, core look time, buildings. closer over taking not justify in mass

Nate Jorgensen

I just in think you that side, just had a concrete. flexibility steel The of on is exceptional, quick against thought other as described and terms as, and the but as not as Mike wood about and on design. competing on described, and Mike story elements construction carbon

measured to good described, one's and ability ultimately, multiple that against about, But to compete we at. So continued as years, are the of the industry, it's storyboard probably some where build across we win see and just alternatives things feel in of concrete. steel Mike given

Operator

Mark question next from And Montreal. of Bank Wilde of our comes

Your is line open.

Mark Wilde

other distribution. been I'm windows about was back just materials other where that improving all this at just or at over Yes, availability point? building how roofing we've Is of curious, shortages? on the things I products, doors, hearing

Jeff Strom

has to and to doors, allocated if allocation The got fact, get Jeff. in levels. side been the strict on to and allocation it's hard Mark, exterior back they're tighter, now try door on anything, just the is the working

of So, that well. roofing been we're There whatsoever. and as little been that's change incredibly has kind on the bit in difficult It's that the side the in. same of no

Nate Jorgensen

on just another overall cases an other capacity Nate. some I are the and services don't products I that comment in think it's industry. represent our Maybe impact and on capability to or distribute, think having we Mark, of quick

again so, its think, with perhaps And certain but for it and we running garage think is. again, capacity garage what overall from don't bottleneck-to-bottleneck are cases limiting I doors. do kind anything industry on some supply sometimes housing doors, specific, in today services. And I but And the the markets, we regionally in both it's is of

been that of remain and has a the we for So, go course storyboard time this to element likely of expect us year. that's as we with period that would through an

Mark Wilde

Nate, issues or west. And wondered on both resins? specialty in could pricing I lines, you any along us other the just then give Well, those sort south Okay. inputs, like an resin particularly update of log and if things availability with

Mike Brown

Yes.

in we particular have space. first that with resins. So, second tremendous just the partners I'll Thankfully, start one

to alike everywhere, happy challenges ago, beat. say back to So, They lose there while lack supply. there Yes, resin. resin going had didn't storms in cause we very and production and around some that, of didn't us some things our here but of a a with shovel were few miss ice time supplying to I'm and a partners we

job. is this opportunity resin to thank my partners because So, an did great they a

digit to call sort QX of, relates log up, single log would pricing, doubt to it has numbers. the South, pricing I'd about As low mid to sort sort In QX there incremental of say, a no gone is it relatively that. increase there I been small has some, of

do has Some general that very guess while, to magnitudes with It's south, of challenging order but next I see we the the over we'll comment, the, have always. nothing of some out a a Northwest. of situations. weather that seen increase of it like little pans is Pacific increases the the in sort as but little how bit been weather in of

in in that increases challenge I'd compared the year, into sort been XX%, magnitude, significantly we to prior have speaking, order higher. west say, generally but has quite continued QX QX. the of of the of not the that seen So have

not will of at all having indicated or that kind of for data challenge the prices sales we certain that, of record that's sales sort a pay purchase of looked set every highs us, I for at, but is back the a of that a of to historical bit of last like sort whole I timber, So, they as bit forward, dropping are time day to levels. all but certain for of move day, there start and to we of reasons the see immediately think of to variety challenge behind the industry, a And bit, I sort that, honest. little a them tail-off a be don't but

So load for higher expect, of time. sustained period costs sort a of

Mark Wilde

Okay.

terms Europe mass the to going partnering see to had to innovative me, up by I I'm European Wood the in that? market, channel just seem we on they wondered, engineered one over companies Products back area. and last Wood seems edge was others for kind generally, the of to timber these the here. of valuable I Now of the start to Binderholz just companies about, the out into something the build asking to companies a pretty here. at been business struck invest thoughts new just Products entree in George Any be it products. And some the was that, market as starting have fact whether in front you like of are some fairly in would And

Nate Jorgensen

Yes, Mark. It's Nate.

timber America, to globe. timber the been parts happening cases, and Europe of I some they've look then what's in building for, us. in think mass ahead when with of is And in other your at opportunity point well mass the here you decades. North

being terms forward. understanding We the solution So, a better what has done. on about look I and time and do and level think this what that have maybe spent our in competence moving capable of relevant European of optimism market

to perhaps they that But expand solution been of world. there parts on Europeans So think I looking their timber, decades steel of certainly mass centered concrete. other part capabilities of a be to not some surprisingly has CLT competitive are have and where in that cases, can are very in Europe, the again, to experience momentum relative proven

happening globe. not it's across something the America, that's in we can from just that to not what's surprise learn So, continue a North happening but and

Operator

remarks. now further like I'm conference the I turn showing would to Nate back questions. no closing to for

Nate Jorgensen

Latonya. Okay, great. Thanks

us well. today again, appreciate and this in we please update your for and interest safe you. Thank stay and With said, be of that support Just, everyone continued joining morning's appreciate Cascade. we call Boise

Operator

participating. for today's call. you concludes This conference Thank

You may now disconnect.

Boise Cascade (BCC) 6 May 222022 Q1 Earnings call transcript