BCC - Earnings call transcript Q3 2024

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Operator

Good morning. My name is Grace, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade's Third Quarter 2024 Earnings Call. [Operator Instructions]

It is now my pleasure to introduce you to Chris Forrey, Vice President Finance and Investor Relations, Boise Cascade.

Mr.

your begin may you conference. Forrey,

Chris Forrey

and Thank like Earnings everyone. Update. would morning, welcome you, Call you Business XXXX Grace, to Quarter to I Third good Boise and Cascade's

Kelly are Head Little, our operations. of Wood Jeff Jorgensen, call our Treasurer; and of today's Operations; Strom, on CFO and me our Joining CEO; Hibbs, Products Building our Troy Distribution Nate Head Materials

to please slides release, these the segment forward-looking to This in adjusted statements. presentation includes that Also, Turning contain EBITDA and net review in EBITDA will with note EBITDA. I GAAP will X. from filings income associated and SEC Nate. to and Please call reconciliations the warning to over our now on our income the appendix press Slide turn statements. forward-looking segment statements the call risks the our the regarding with

Nathan Jorgensen

for housing everyone. earnings and Total morning, single-family Good call Chris. the compared X% prior year I'm to Thank U.S. on today. our quarter. Thanks, joining #X. starts X%, and Slide you us respectively, for starts decreased housing for

billion Our quarter down sales quarter of were consolidated $X.X X% XXXX. from third third

Our -- company customers matter economic deliver challenges our to the partners And no I or year income good per $XXX.X to to uncertainties. value continues of who to environment. net affordability the in want was million in a well results share our constrained financial or our $XX and income per by vendor across be that net $X.XX the businesses of ago compared delivered thank associates quarter. Both share performed deliver $X.XX and home demand to million and environment continued demand superior

we our on capital take detail. projects through before through Kelly? insight capital an fourth In our give I'll returns capital quarter After addition, financial then now walk outlook growth allocation to will of Kelly update in the an organic on which, we and some provide shareholders. results, continue additional and your provide our questions. segment our deploy to more

Kelly Hibbs

to million and of you, to year the in our in were Good segment morning, due reported year well the Wood decreased Products sales billion, third was the as down to prices BMD due prior everyone. quarter. decrease sales segment decrease BROSCO sales the million segment EBITDA in lower EBITDA quarter gross to segment sales the mainly Products segment EBITDA third quarter. compared distribution $XXX.X down quarter XXXX. BMD segment $XXX.X The to EBITDA. The third to $XX.X ago Nate. and was $XX.X EBITDA the $X.X million, $X.X in quarter expenses the prior The including compared increased quarter Wood EBITDA $XXX.X XXXX. to million from year compared Thank were XXXX. quarter million BMD primarily third reported quarter, in third volumes plywood Lower X% million of sales by margin $XX dollars Selling compared million in from acquisition. distribution the costs. quarter, to higher in contributed also of EWP as I-joist conversion XX%

sales LVL increasing Turning were the periods pressure year-over-year same and and X% Slide volumes an quarter a X%, to XX%. to down down factors, sequential floor On and LVL both in and the competition comparative Sequential volumes pricing for limit applications housing by were X. And third over continued starts, level opportunity. the from was wood-based down basis, that proportion floor were I-joist and respectively, of I-joist of wood market. concrete pricing other X% influenced including multiple products and I-joist flat due for volumes

Slide to X. Turning

year-over-year the flat XXX quarter. plywood XXX down sales The per was volume price with sales in XX% plywood quarter thousand net the average quarter ago third million Our feet, year was third around We X% of pricing September per thousand. the price lower July with quarter thousand the realizations at and per our plywood end average approximately in before at sequentially. $XXX rebounding $XXX experienced

to decline was X% BMD's decreases Slide volumes by sales sales were price X flat. third year-over-year of as driven Moving quarter and sales X.

of the BROSCO BMD impact decreased general from decreased sales have increased commodity product XXXX. would X% By quarter the sales decreased of Excluding acquisition, EWP sales XX%. XX%, product sales line line, and third X%

mentioned in million year. decreased the As last compared $X.X earlier, quarter dollars same to gross third quarter margin

of As expected, lower were commodities dollars. the decline margins margin drivers EWP the in on and principal

represented sales as in well margin which that category. XX.X%, gross up increase the XX margin as BMD's is line of ongoing points percentage reflective This general in was our year-over-year improvement mix year-over-year. BMD's basis growth However, XX% sales, both quarter of third in

the down quarter, year basis EBITDA in for quarter XX and the was X.X% sequentially. ago X.X% the points reported from BMD's margin down

BMD's the are We in X. Slide pleased market with quarter on given the now landscape. performance third I'm

third the forward quarter, Looking comparable our plywood were fourth to resilient quarter were averages. monthly and October to volumes as they EWP

to seasonal quarter for fewer progresses. BMD will quarter and With to factors proceed erosion plywood October volumes we single-digit we EWP expectations, the expect sales through approximately fourth averages, seasonally be as above pricing, days but headwinds when X% QX low declines regards On X we as pricing, quarter. were price in the On sales we'd QX expect seasonal the us. However, lower compared price in realizations currently sequential quarter. expect third

third Our daily approximately X% daily averages December. erode November quarter October in expected through and below sales is and to pace further sales is

spending ended on had $XXX $XX of with million capital million Products X XX. in and expenditures BMD. months million of spending now in Wood the Slide We September XXXX of I'm in $XX

previously disclosed delays spending range. equipment reduced our capital have XXXX related year multiyear our U.S. Southeast full the Some projects in to

completed expected. the anticipate pace and fourth still our projects quarter as accelerate However, on we these will meaningfully spending in schedule be will

capital to and Looking $XXX forward to $XXX XXXX, million we expect our be million. spending between

$XXX Speaking shareholder combined X million XX, paid special and during the September to months regular in dividends we returns, ended XXXX.

see dividend as on common our payment Shareholders this share XX. Our per of December record of dividend quarterly on will Board Directors December recently also $X.XX X approved of stock. a of

third million million repurchases $XXX or we repurchases. of year-to-date approximately the X.X funded quarter, During $XX approximately our total stock are nearly October, common also million Through share shares.

addition, our authorized returns stock Today, strategy and shares under recently program. additional of organic existing repurchase have share with our million X.X growth program. common In our continues X an available shares we Board for repurchase repurchase Directors our million ongoing deployment our shareholders. In the under approximately in asset to base, of our investments capital projects summary, repurchase

the our flexibility business execute to turn strategy. I have opportunities if discuss outlook. align with to surface now M&A also Nate We back over will that our to it

Nathan Jorgensen

as U.S. I'm X.XX at starts approximately XXXX. #XX. modestly on Kelly. to by U.S. housing forecast million million in housing Bureau. actual XXXX above and are for Slide Thanks, Current X.XX starts Census million the or for X.X for compares reported XXXX of industry This

capital September levels mortgage to challenges of single-family sharply increased home homebuilders the with home rate supply due affordability plan rate starts challenge financing to complexity XXXX. Home as as starts offering prices due and declined of remains Large available As of for well are have addressing housing in historic whereas multifamily from are the affordability housing outpacing completions cost and many of levels multifamily historic for XXXX, developers by levels XXXX buydowns. by stock costs a XX%, reducing consumers sale. sizes unit mortgage and existing for levels limiting

forward. an housing supply to will continue source construction residential of important moving be New

spending the elevated XXXX of continue stock housing home to levels reflect equity in expect a modest will to of We as age and U.S. provide improvement for spending. backdrop growth repair homeowner and favorable remodel

is every particularly and our unmistakable, X-step will distribution, in and partners and prove continue the customer value modest, support growth ability our brands demand may nationwide for deliver proposition near-term to While the each leading in service of marketplace execute across day. in to supplier we

you for you of today and the our your focus on and interest the remain open housing on which maintain bullish we we Grace, questions phone a As continued the please to near-term our would and medium- any initiatives. us welcome support longer-term on affords the us this execution Cascade. clear and in past uncertainties, growth Boise time. at view the ability fundamentals, We lines? joining Thank strategy look

Operator

Instructions]. [Operator

from of with question Securities. first Truist Michael line Our the comes Roxland

Michael Roxland

Congrats on a quarter good the very backdrop. despite

talk like progression seems packaging Just that first and many if quarter. And may soften just . had in quarter across have month about wondering the faded in in paper during materials. you on a I'm BMD BMD, off was you It the stronger can September. earlier sales September the of sales

Kelly Hibbs

Yes.

good yes, So question, Mike.

there So steady impact August had we fewer on actually September, I was would levels a a just sales and quarter. wasn't was whole only July, -- really daily say the activity too deviation we just lot days. really were our September through pace in sales the of saw fairly

Michael Roxland

a like some from customers and are regarding product inventory hearing major Got Perfect. commodity EWP type by now And what in you general levels. it. of demand BMD your line, right

Jeff Strom

overall, is dealers say, our Jeff. commodity some we're just truly is This just market, this cautiously. very are saying what past in The proceed nice hearing I month. got from obviously, it's we've tailwinds the would -- customers

So very think with It's into moved seasonality to on be commodities hard that going market. much activity fair here of there's distribution-friendly direct the But a lean I market. lot to there. amount in, in distribution. of going a a We forward from they're coming going

Michael Roxland

question one you. turning it last And before Got Great. over.

some to EWP may that or prices cyclical recently, that any from of volume the mean, shift to have be EWP, at on you lumber given I lows, Just weakness? been have up shift contributing seen until share lumber

Nathan Jorgensen

Mike, a think -- it's Yes, good question. Nate. I

true what pricing they pretty kind kind I of floor think the builders in independent look environment. of kind of systems, and the terms use services resilient products of and on of how they're stay at

certainly seen steady prices lumber. lot despite haven't we a pretty That's systems I-joist off. from have to fact, of consistent lumber the come obviously, been So EWP drift dimensional and or

challenges our the as only are of but Mike, looking guess, that I cost, going talked as also of forward past cycle And be, part not that, for, we've are in would that their material times. So as build view well. builders

a of as how to do is out they cycle, important of part the they that simplicity an equation. so think take time cycle, EWP the about And construction really add

expect So and remains pretty stable, it we going that forward.

Operator

from Susan comes Goldman the question of with Sachs. next Our line Maklari

Susan Maklari

side you margins, flowing on to continues perhaps I that decline talk can you've does also can about if mean pricing? also seeing inflating, weeks, taking that the And thinking be the given through? talk other that the is several EWP then, last and as guess, you pricing to year, just sequentially? the could what next that, that been of which through EWP question especially seem about How lumber EWP for you're My is and over

Kelly Hibbs

Yes.

EWP this So in but of lot that Sue, And potentially don't there. of and I could question is a take that. how model in I me, pricing part correlate of increasing front first your there's around correlation don't terms have of statistical the pricing, Kelly. I'll lumber a think

be fundamentally rates and demand by will pricing driven I and EWP starts. think really particularly single-family operating

So your I And a the remind draw there. part then me what second it again, correlation wouldn't of -- around question please? was

Susan Maklari

as decelerate margins, you pricing basis? EWP sequential The a on that Yes. saw

Kelly Hibbs

Yes.

there But as well. level. some aggregation good to margin at of pricing on because fairly So bit business's -- integrated in we the total to still specific come remaining we've to how and because high weak don't executing pricing pretty they're EBITDA Products little we And posture would operating EWP. focus how about speak Wood plywood margin we seen and in integrated off and how feel your operating are. a of just I of in have a continue EWP

Susan Maklari

doing your key getting then bit in their of right. about terms business, perhaps lot partners vertically Kelly. of their a a helpful, thinking work product expanding And All offerings, That's the Okay. are in deeper some there of businesses. BMD

that As What you think Boise? coming mean for that strategy through. does about

it over about today, line guess And that part move general to think it's a will your time? how about to see that Or get through? of you sales I perhaps XX% think number? do I higher Could XX%, of when you as being, XX% we helping all that, how become

Nathan Jorgensen

it's Sue, Nate.

I'll Let fill start me and as here Jeff I'll in that, -- have well.

of SKUs partners our approaching are I coming new model their how products number they're mix. seeing think the going to -- in forward, maybe business of we and your vendor and question clearly, on terms into a

kind we SKU continues look supportive really, the at which grow, of really of it And to X-step is to so me, as intensity, distribution.

simplicity we key by in that an they for equation. Our And orders. downstream partners, of introduced new looking are products and are how fulfill as of are important our services terms part customers

more responsibility we as the puts think distribution, new and to of about that. products, So services, that we of X-step new looking forward think kind kind on we're

on terms the the optimism I demand market in that both there the component of think the other measured think, supplier on to is is, I customers, the on side. where is side, maybe

So dependency be footprint their X-step I distribution of as pretty think they're going measured on in that to there well. capital will terms be and working

really of obviously, new moving it, well SKUs, a our I really demand the I think that's customers, with look the to environment we we along have new combination that at with And So are. forward. importance too, as supplier and speaks tepid, pretty products, partners who

kind I that. think the on the on of upside to and your today XX% question for what's mix

I we the we to that overall millwork really make, are at BMD, part think who to segment. as we and door an continue including look the continue our grow important you to is franchise but general lines a investments want of that, in and

years. have suppliers want of customers over So continued for to we both represents segment. to grow as last that of we and the growing our our continue really couple kind think opportunity, we And good here in that that

Susan Maklari

squeeze And a up about couple buybacks how shareholder you about next And and quarter. Can more share how really any thoughts this Okay. That's color. come nicely helpful could over if the which quarters? in, talk on capital you I that through the returns you're just is very may allocation just X here? then of from picked thinking bit

Kelly Hibbs

Kelly Yes. Sue, this again. is

big in So across script Southeast. is growth some much in in replacement the well of say capital the same. facilities as as We yes, organic needed certain the know, very of terms narrative spending us, I'd some as you ahead the got

special to dividend makes of staying beyond quarterly of availability, ahead up flexibility but there. M&A execute that little So in some to in share. going We as dividends as that, continue terms but either dividend we're if do in very do big it opportunistic not excited as it, share the because number term, there third just to to quarter. and did September, or to in the repurchases. repurchases. look did something to here as $X then I on spending the components the we're much And then have the Near equipment around the put buy dollar be value timing share we've shares expect X special demonstrated, we we'll still And a shows continue special regards got course a per relates sense. upon well a behind to We the we've or that similar share

Operator

One question. line of question Yinger Kurt D.A. moment next for comes next our the with Davidson. Our from

Capital. line Jeffrey Our of next question comes from the Loop Stevenson with

Jeffrey Stevenson

headwinds sales, I of product just of years, Susan's the they to key driven we've category? up your being relative and on wanted with driving on by question in expansion really to continue and seeing. last well general offsetting over hold line follow partially you're this some suppliers geographic outperformance line the the commodity several the pricing had general Is

Kelly Hibbs

Denver, BROSCO, acquisitions. we've City the I'd Kansas small and acquisition to with but also it's done a Boise Houston, like door things, we've did say some just purposeful then Dallas, done It's our of things around Jeff. do network combination some strategy in recently. do like not start-ups we There and

then purposeful. we those regards, SKUs of to earlier to part question the in that's marketplace get add from of continuing So them. other around very benefit for into the suppliers our and And some ability

it's I'd driving of that. a So combination Jeff, say things,

Jeffrey Stevenson

and EWP X things. Okay. in No, on we while same those the move great kind next single-family pricing at face balancing just your to just then distribution see next you're year's housing spring how you'll the hear. the with you're continue season? into over how that's some you of wondering I'm time, business So to given as likely selling improvement X starts And commodity inventories months, approaching wondering headwinds, I'm

Jeff Strom

it to serve Jeff, a inventory. have balancing slowdowns distribution-friendly tell customers market. right is is have you is now. the now. time, to a want right is right coming same to act we what is there the of you, do it know We I be It need the at But would Jeff. this who amount our seasonal

to going of to we're If on serve the X. side at we're to looking the our having inventory on So one side, we're err err going customers.

Jeffrey Stevenson

But sense. at the That during line expecting other this, time period? that time missed the loss got And And offset are on the plant you to if facilities I Great. apologize, I late. largely plant just Okay. makes Louisiana capacity modernization. Oakdale for I

Troy Little

the and is back Yes, first the we'll Yes, on is dryers Little. second this on then a Jeff, starting and go start up during quarter. project the Troy quarter XX% week, in then the down timing capacity, be this X fourth actually quarter demolition through the at about

to working also addition log we're on In utilization our that, center.

also did that we impact some the we project right inventory terms other Thorsby [ that. make of now were year. your during available just sure But don't yes, our ] of at pre-spending prepared, on in We parallel this the in is of that to order, So next in work they at spending veneers. and activity have then to on Line being will around accumulated some we time. well have going And for facilities kind underway some customers any terms expect question

prepared So we're it. into going well

Operator

Our next of Ketan Capital Mamtora from the Markets. question BMO comes from line

Ketan Mamtora

things that way a sort has start currents market? to with, going levels about on there is QX, BMD, of think stabilize, it step -- are sort on like better in What piece, we taking down? just getting is quite sounds a to cyclically bit in demand. of held Perhaps of seasonal about it? of are sort quite sort seeing sort right slowdown EWP as the think volumes us to think in have And or you given are cross you the of you this in pointing but of well, about and October both How activity would

Kelly Hibbs

good -- Those are Ketan. right those the Yes. are questions, questions, all

held yes, well. up So October

certainly weather there around by impacted out October. happy results days, good narrative be sales days sales could really in kind November and rates factors month, and the environment. with in the continued Come XX just mortgage and and December, other think the of then kind of fewer I uncertainty strong

So I -- -- volumes they will single-family starts. suspect will would I largely trend our housing think with EWP

to down year and nice to, expect quarter. And again, big we fourth margin relates we how line come fewer the so right BMD, quarter. a there's be And little getting them terms we margin from bottom then a alluded Nate, November that off last line of would last BMD's driver We're Ketan. follow-on trend saw pace, commodities. in to October, here, see And it a results as bit in but in I fourth of think in will goodness the top the like And But expect now a year can again, -- as dollars you much sales days. profile had think December. we'd of I to I in sales generate again,

Nathan Jorgensen

Yes, Nate. Ketan, it's

other what's Just described, just marketplace we've pivot add the us is, in would I to of on is as a for of volatile our industry and And happening got quickly. a in you thing I important to make kind just most of what's terms of think outside items, both sure range capability pretty it's it.

the whatever And that respond be. so marketplace, might to to

reasonable term. And happened decisions so as on Kelly a resilient supply of supply terms in described, what's October has has created of terms of backdrop the here been reduced short in some and commodities pretty

our suppliers is in So our customers both commitment a position promise to to serve. be and and to

be to a spot but can sure environment really pivot we're going overly again, it's And in not to, good make in so predictable, we're where appropriately. an we

Ketan Mamtora

ones. of BROSCO couple Curious how a the just quick business And performing? helpful. is That's Understood.

Jeff Strom

little It's BROSCO well. performed and is a hope -- be more. to It really rock far we'd been business solid. so it's has bit everything

Ketan Mamtora

in in it. Got third operating maybe quarter? Kelly, your rates then, And EWP the

Kelly Hibbs

operating pretty quarter in consistent-ish the XX%. right Yes, volumes our XX% around the they . were third right -- rates Per around and quarter. with second are were

Operator

the of [Operator comes D.A. Kurt Davidson. Instructions] Our from next question Yinger with line

Kurt Yinger

Okay.

Sorry about that earlier.

Clearly, wanted to X mostly and I-joist, mix start to volumes kind up quarter, of of terms in Just you that kind just LVL just off would year-over-year the geographic in but on of slab? EWP. chalk stability versus

Nathan Jorgensen

would than Yes, Keith more an I at when look by influenced it's as I-joists that LVL probably Nate. -- Yes, headers on Kurt, mix are sorry, say example. you

on there's if if and So to for not still it construction a an your it's of slab on-grade LVL construction, single-story opportunity represents slab for lot especially grade. only so, obviously, point, a

a view much again, it So consistent as expectations. geographic statement, we very that's, with and mix

Kurt Yinger

the I-joist your relative of talked relative that think year a over potentially and now, driver last floor hearing you're it. sentiment back underlying one this about that could mean X trusses. you towards stage single-family whether whether of has broadly outperformance a at shift starts something I'm that's Got demand? And to big quarters I of customers versus curious maybe be next kind

Nathan Jorgensen

simplicity again. for trusses how Nate builders I are cycle success just job it's at they're to looking say EWP the to what it web they how speed I-joist again, would as site versus Kurt, in open a thinking about, systems, Yes, terms I the times. floor comment represents do and at plated create comes when floor I-joist, that. they're And of on competitive made has them, looking and be and earlier

backdrop and floor environment about given think we we as get good which the how feel they to is trying about do against builder what is trusses, wood, reduce engineered part the competing against times. that cycle accomplished, So in plated

Kurt Yinger

Got it.

line any downtime? it's the way kind couple discrete I over doesn't is of related And outlining quarters? the Oakdale. appreciate going think then impact P&L of any of sound next of there of the headwinds about to kind to should volumes. be aware Okay. Obviously, with temporary time But kind cost it to Kelly, Troy like impacts we

Kelly Hibbs

maintenance our Yes. Nothing just yet, some build downtime Kurt. I'd take typically that anyway. quarter probably during mean fourth in we is and have quarter specifically you -- usually I

assess So as And have lot impact that. We'll move speak to of, if to I share wouldn't we meaningful anything we'll to we a expect that. XXXX. of into year-over-year from see continue

very of we'd veneer I because job point, this that did support team veneer important great a share a in Troy's Oakdale have point, Alexandria, plenty Louisiana. the anything in But Southeast EWP think to meaningful. is marketplace the supplier, at making To we of don't sure

volume good will. It to on inventory there. we've much Yes, we Oakdale, bit But than have of to Alex our impact supplier. it veneer quarter? a first the done and building of volumes. Might little we big into a a has more a impact plywood second plywood meaningful does EWP So job it's

Kurt Yinger

Got it.

November And finally, December Okay. bit then commodity pretty BMD the margins. October, you've fair But little That's bring that just and a what front. is pricing gross see still on gross in on great. than strong to We'll be QX even better would seen was what say it what a margin performance?

Kelly Hibbs

Yes. I mean know, sales a was my energy October -- The much see of a phenomenon bit commodities. the as than commodities that's -- for was and good. the good. has energy little demand. think in supply-driven been Again, And solid, we'll pace in was view, margin you I

what December. we'll here in and So see November happens

Kurt Yinger

in kind last of what the ramp a capacity, growth obviously, the there. to ramp of or into lot of then I'm front. materializes year, And Perfect. the kind uncertainty just runway kind next terms flexibility of going of and facilities one, some how in labor EWP depending of for demand you're up ultimately on Okay. around installed down curious positioning given the on

Troy Little

mean Yes. our model. This of speaks is I kind integrated to Troy. that

to to any the if keeping so plywood in to veneer shift need terms we've we that. do got employees, production time some have the and/or And of over ability side,

we think a don't I so And huge risk there. have

easing of side labor terms I expansion, on mean, bit. a the In there's little

for prepared we to that's to turnover, relative need we're have but And ramp a we add. -- would in advance up to additional -- degree so any we the shifts it's that that, that of always matter

think good. I So we're

Operator

further session. back at Jorgensen I'm for time. showing I would And turn questions This Go to Nate now closing concludes it remarks. the question-and-answer like no ahead. this to

Nathan Jorgensen

for for your be continued Cascade. appreciate thank you our be and We you. this Grace. and everyone Thank Thanks, joining and Boise morning Great. interest Please us of support update, safe well.

Operator

the your you conclude conference. This Thank today's participation in program. for does

disconnect. You may now

Boise Cascade (BCC) 5 Nov 242024 Q3 Earnings call transcript