Boise Cascade Company (NYSE:BCC) Q1 2022 Results Conference Call May 6, 2022 11:00 AM ET Company Participants Kelly Hibbs - Senior Vice President, Chief Financial Officer and Treasurer Nate Jorgensen - Chief Executive Officer Mike Brown - Head, Wood Products Operations Jeff Strom - Head, Building Materials Distribution Conference Call Participants Mark Wilde - Bank of Montreal Susan Maklari - Goldman Sachs Kurt Yinger - D. A. Davidson Reuben Garner - Benchmark George Staphos - Bank of America Operator Good ...

Boise Cascade Company (NYSE:BCC) Q4 2021 Earnings Conference Call February 23, 2022 11:00 AM ET Company Participants Kelly Hibbs – Senior Vice President, Chief Financial Officer and Treasurer Nate Jorgensen – Chief Executive Officer Mike Brown – Head-Wood Products Operations Jeff Strom – Head-Building Materials Distribution Conference Call Participants Mark Wilde – Bank of Montreal George Staphos – Bank of America Susan Maklari – Goldman Sachs Kurt Yinger – D. A. Davidson Reuben Garner – Benchmark Operator ...

Part I [Business](index=7&type=section&id=Item%201.%20Business) Boise Cascade is a leading North American producer of engineered wood products and building materials, operating through two integrated segments - **Boise Cascade** is **one of the largest producers** of engineered wood products (EWP) and plywood in North America and a **leading U.S. wholesale distributor** of building products[18](index=18&type=chunk) - The company operates through **two reportable segments**: Wood Products and Building Materials Distribution (BMD), which are **highly vertically integrated**[21](index=21&type=chunk) - **Key business strategies** focus on **increasing earnings and stability** by **growing EWP sales**, **expanding distribution capabilities** through acquisitions and organic growth, **leveraging the integrated model**, **driving operational excellence**, and **accelerating innovation, digital technology, and diversity & inclusion efforts**[23](index=23&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [Wood Products Segment](index=15&type=section&id=1.1%20Wood%20Products%20Segment) The Wood Products segment manufactures engineered wood products, plywood, and lumber, with **2021 sales of $1,970.8 million** and **segment income of $531.2 million** Wood Products Segment Financials (in millions) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Segment sales | $1,970.8 | $1,323.9 | $1,275.2 | | Segment income (loss) | $531.2 | $127.7 | $54.2 | | Segment EBITDA | $586.5 | $198.9 | $111.9 | Wood Products Sales Volumes (in millions) | Product | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | LVL (cubic feet) | **18.2 cubic feet** | 17.3 | 17.9 | | I-joists (lineal feet) | **290 lineal feet** | 241 | 227 | | Plywood (sq. ft. 3/8" basis) | **1,259 sq. ft. 3/8" basis** | 1,253 | 1,337 | - In 2021, EWP and plywood accounted for **51%** and **40%** of Wood Products sales, respectively. The BMD segment is the **largest customer**, representing **62% of the segment's sales**[58](index=58&type=chunk) - Wood fiber is the **primary raw material**, accounting for approximately **45% of operating expenses** (excluding depreciation) in 2021. Logs make up **66% of wood fiber costs**[52](index=52&type=chunk)[53](index=53&type=chunk) [Building Materials Distribution (BMD) Segment](index=18&type=section&id=1.2%20Building%20Materials%20Distribution%20(BMD)%20Segment) The BMD segment operates a nationwide network of 38 distribution facilities, achieving **$7,174.3 million in sales** and **$481.1 million in segment income** in 2021 BMD Segment Financials (in millions) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Segment sales | $7,174.3 | $4,952.0 | $4,137.7 | | Segment income | $481.1 | $247.5 | $116.2 | | Segment EBITDA | $505.1 | $270.0 | $137.0 | BMD Product Line Sales Mix (% of Sales) | Product Line | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Commodity | **51.6%** | 46.6% | 41.7% | | General line | **30.2%** | 35.6% | 38.2% | | Engineered wood products | **18.2%** | 17.8% | 20.1% | - The segment operates a **nationwide network of 38 building materials distribution facilities** and one component manufacturing **plant**[62](index=62&type=chunk) - The segment markets products to dealers, home improvement centers, and specialty distributors through a decentralized sales force, utilizing both warehouse and direct sales channels[63](index=63&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) [Customers and Competition](index=19&type=section&id=1.3%20Customers%20and%20Competition) The company's **largest customers are Builders FirstSource and Home Depot**, competing in fragmented markets based on price, quality, and service - Builders FirstSource and Home Depot are the company's **largest customers**[68](index=68&type=chunk) - Wood Products competes with major North American producers such as Weyerhaeuser, Louisiana-Pacific, and Georgia-Pacific, primarily on price, quality, and availability[69](index=69&type=chunk) - BMD competes in a highly fragmented market against national and local distributors like BlueLinx Holdings and Weyerhaeuser, based on pricing, product availability, service, and geographic coverage[70](index=70&type=chunk) [Human Capital Management](index=20&type=section&id=1.4%20Human%20Capital%20Management) Boise Cascade employed **6,110 associates** in 2021, prioritizing safety and offering a comprehensive Total Rewards program for talent retention - The company employed **6,110 associates** and prioritizes health and safety as a core value, implementing programs for hazard identification and COVID-19 mitigation[73](index=73&type=chunk) - A comprehensive **Total Rewards program** is in place, offering competitive pay, health benefits, 401(k) plans, and career development to support talent retention and development[74](index=74&type=chunk)[75](index=75&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its business, regulations, and stock ownership, including commodity price volatility and operational disruptions - A portion of products are commodities (OSB, plywood, lumber) with **volatile pricing** dependent on supply and demand, which is closely tied to cyclical U.S. new residential construction[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - Operational risks include **potential disruptions** from the COVID-19 pandemic, **cyber security breaches**, equipment failure at manufacturing facilities, **labor shortages** (with **23% of employees** under collective bargaining agreements), and dependence on third-party transportation[107](index=107&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk)[114](index=114&type=chunk)[119](index=119&type=chunk) - Financial risks include **significant customer concentration** (top ten customers were **42% of 2021 sales**), **credit risk**, **potential impairment** of long-lived assets and goodwill, and **restrictive covenants** in debt agreements that limit dividends and investments[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[139](index=139&type=chunk) - Regulatory risks include compliance costs for environmental laws, potential impacts from climate change legislation, and evolving data privacy laws[141](index=141&type=chunk)[142](index=142&type=chunk)[145](index=145&type=chunk) [Unresolved Staff Comments](index=40&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the SEC staff - The company reports no unresolved comments from the SEC staff[159](index=159&type=chunk) [Properties](index=40&type=section&id=Item%202.%20Properties) Boise Cascade owns all Wood Products manufacturing facilities and operates **38 BMD warehouse facilities**, with a portion owned and the rest leased - The Wood Products segment owns all its manufacturing facilities, including **8 plywood/veneer plants**, **5 LVL/I-joist/laminated beam plants**, and **2 sawmills** across the U.S. and Canada[161](index=161&type=chunk)[162](index=162&type=chunk) - The BMD segment operates **38 warehouse facilities** with a total of **5.5 million square feet**, of which **2.4 million is owned** and the rest is leased[163](index=163&type=chunk) [Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings but does not believe any will have a material adverse effect on its financials - The company is involved in ordinary course legal proceedings but does not believe any will have a material adverse effect on its financials[164](index=164&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[165](index=165&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Boise Cascade's common stock trades on the NYSE under 'BCC', with a common stock repurchase program having **496,989 shares** remaining available as of December 31, 2021 - Common stock is traded on the New York Stock Exchange (NYSE) under the symbol BCC[167](index=167&type=chunk) - A stock repurchase program allows for the purchase of up to two million shares; as of December 31, 2021, **496,989 shares** may still be purchased under the program[171](index=171&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, **income from operations surged to $971.8 million** on **$7.9 billion sales**, driven by strong demand and favorable pricing, with **$667.0 million cash from operations** [Results of Operations](index=46&type=section&id=7.1%20Results%20of%20Operations) Total sales increased **45% to $7.9 billion** in 2021, with income from operations rising to **$971.8 million**, driven by higher prices and volumes in both segments Consolidated Operations (in millions) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Sales | $7,926.1 | $5,474.8 | $4,643.4 | | Income from operations | $971.8 | $335.0 | $136.5 | | Net income | $712.5 | $175.0 | $80.9 | - **2021 vs. 2020:** **Total sales increased by $2,451.3 million** (**45%**), driven by higher sales prices and a **16% increase** in U.S. housing starts. **Wood Products sales rose 49%** due to higher prices for plywood (**+75%**) and EWP (**+19-22%**). **BMD sales grew 45%** from price (**+42%**) and volume (**+3%**) increases[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - **2020 vs. 2019:** **Total sales increased by $831.4 million** (**18% to $5.5 billion**), driven by higher commodity prices and a **7% increase** in U.S. housing starts. **Wood Products sales rose 4%** due to higher plywood prices (**+30%**) offsetting volume declines. **BMD sales grew 20%** from price (**+13%**) and volume (**+7%**) increases[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=7.2%20Liquidity%20and%20Capital%20Resources) The company ended 2021 with **$748.9 million in cash** and **$1,094.9 million in total available liquidity**, with 2022 capital expenditures projected at **$110-$130 million** - **Ended 2021 with $748.9 million in cash** and cash equivalents and **total available liquidity of $1,094.9 million** (including undrawn credit lines)[228](index=228&type=chunk) Cash Flow Summary (in thousands) | Activity | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net cash provided by operations | $666,984 | $294,516 | $245,647 | | Net cash used for investment | ($105,586) | ($78,716) | ($94,065) | | Net cash used for financing | ($217,873) | ($95,655) | ($58,016) | - **Capital expenditures for 2022 are expected to be between $110 million and $130 million**, focusing on business improvement, replacement, and expansion projects[241](index=241&type=chunk) - In 2021, the company **paid $213.7 million in dividends**, including a regular quarterly dividend and supplemental dividends[244](index=244&type=chunk) [Critical Accounting Estimates](index=62&type=section&id=7.3%20Critical%20Accounting%20Estimates) Critical accounting estimates include EWP rebates and allowances, with a **$117.5 million payable** at year-end 2021, and long-lived asset impairment assessment - **EWP Rebates and Allowances**: Estimating rebates is inherently difficult due to the time lag of information as products move through the supply chain. The EWP rebates **payable was $117.5 million** at December 31, 2021[282](index=282&type=chunk) - **Long-Lived Asset Impairment**: The company reviews assets for impairment when a triggering event occurs. This requires significant assumptions about future sales, pricing, and costs. No triggering events were identified in 2021[283](index=283&type=chunk)[285](index=285&type=chunk) [Financial Statements and Supplementary Data](index=65&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents consolidated financial statements for 2019-2021, showing significant growth in 2021 with **net income reaching $712.5 million** [Consolidated Financial Statements](index=65&type=section&id=8.1%20Consolidated%20Financial%20Statements) The consolidated financial statements show 2021 sales of **$7.9 billion**, net income of **$712.5 million**, and total assets of **$2.57 billion** Consolidated Statement of Operations Highlights (in thousands, except per-share data) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Sales | $7,926,111 | $5,474,838 | $4,643,404 | | Income from operations | $971,803 | $335,029 | $136,459 | | Net income | $712,486 | $174,979 | $80,925 | | Diluted EPS | **$17.97** | $4.44 | $2.06 | Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total Current Assets | $1,885,878 | $1,308,855 | | Total Assets | $2,572,640 | $1,965,718 | | Total Current Liabilities | $640,746 | $524,002 | | Long-term Debt | $444,628 | $443,792 | | Total Stockholders' Equity | $1,352,619 | $850,799 | [Notes to Consolidated Financial Statements](index=71&type=section&id=8.2%20Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment information, debt, and retirement plans, including a **$138.1 million rebate payable** and **$444.6 million long-term debt** in 2021 - **Revenue Recognition (Note 3):** Revenue is recognized when control of goods transfers to the customer. Customer rebates, a significant estimate, are recorded as a reduction to sales. The rebate **payable was $138.1 million** at year-end 2021[339](index=339&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk) - **Debt (Note 9):** As of Dec 31, 2021, **long-term debt totaled $444.6 million**, consisting mainly of a **$50 million ABL Term Loan** due 2025 and **$400 million in 4.875% Senior Notes due 2030**. The company had **$346.0 million of availability** under its revolving credit facility[363](index=363&type=chunk)[366](index=366&type=chunk) - **Retirement Plans (Note 11):** The company **terminated its qualified defined benefit pension plan** in December 2020, resulting in a non-cash settlement charge of **$6.2 million**. It continues to sponsor defined contribution (401k) and nonqualified deferred compensation plans[383](index=383&type=chunk)[384](index=384&type=chunk) - **Segment Information (Note 16):** In 2021, Wood Products had **segment operating income of $531.2 million** on sales of **$1.97 billion**. BMD had **segment operating income of $481.1 million** on sales of **$7.17 billion**[440](index=440&type=chunk) [Controls and Procedures](index=106&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with an unqualified auditor opinion - The CEO and CFO concluded that as of December 31, 2021, the company's **disclosure controls and procedures were effective** at a reasonable assurance level[466](index=466&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2021. This assessment was audited by KPMG LLP, which also issued an **unqualified opinion**[469](index=469&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=109&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement - Required information regarding directors and corporate governance is incorporated by reference from the company's Proxy Statement for the 2022 annual meeting of stockholders[474](index=474&type=chunk) [Executive Compensation](index=109&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive and board compensation is incorporated by reference from the 2022 Proxy Statement - Required information regarding executive compensation is incorporated by reference from the company's Proxy Statement for the 2022 annual meeting of stockholders[475](index=475&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=109&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the 2022 Proxy Statement - Required information regarding security ownership is incorporated by reference from the company's Proxy Statement for the 2022 annual meeting of stockholders[476](index=476&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=109&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related-person transactions and director independence is incorporated by reference from the 2022 Proxy Statement - Required information regarding related transactions and director independence is incorporated by reference from the company's Proxy Statement for the 2022 annual meeting of stockholders[477](index=477&type=chunk) [Principal Accountant Fees and Services](index=109&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 'Audit Committee Report' section of the 2022 Proxy Statement - Required information regarding accountant fees and services is incorporated by reference from the company's Proxy Statement for the 2022 annual meeting of stockholders[478](index=478&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=110&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed as part of the Form 10-K, including consolidated financial statements and various agreements - This section contains the **list of all financial statements and exhibits** filed as part of the Form 10-K[479](index=479&type=chunk)[480](index=480&type=chunk)

Boise Cascade Company (NYSE:BCC) Q3 2021 Earnings Conference Call November 2, 2021 11:00 AM ET Company Participants Kelly Hibbs - Senior Vice President, Chief Financial Officer and Treasurer Nate Jorgensen - Chief Executive Officer Mike Brown - Executive Vice President Jeff Strom - Executive Vice President Conference Call Participants Mark Wilde - Bank of Montreal George Staphos - Bank of America Charles Perron - Goldman Sachs Reuben Garner - Benchmark Operator Good morning. My name is Chris, and I will be ...

[PART I—FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Boise Cascade Company as of September 30, 2021, highlighting significant increases in nine-month sales, net income, cash, and stockholders' equity driven by favorable market conditions [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Nine-month sales increased by **53.5% to $6.14 billion** and net income surged by **265% to $543.4 million**, while Q3 sales grew **18.3% to $1.88 billion** but net income decreased **11.1% to $91.7 million** Consolidated Statements of Operations Highlights (in thousands, except per-share data) | Metric | Q3 2021 | Q3 2020 | Change | Nine Months 2021 | Nine Months 2020 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Sales** | $1,879,451 | $1,589,313 | +18.3% | $6,143,928 | $4,002,607 | +53.5% | | **Income from operations** | $129,386 | $158,572 | -18.4% | $744,422 | $235,889 | +215.6% | | **Net income** | $91,699 | $103,192 | -11.1% | $543,411 | $148,978 | +264.8% | | **Diluted EPS** | $2.31 | $2.61 | -11.5% | $13.71 | $3.78 | +262.7% | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased **31.7% to $2.59 billion** as of September 30, 2021, driven by a **94% rise in cash to $786.9 million**, with total stockholders' equity growing **53.5% to $1.31 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | Change | | :--- | :--- | :--- | :--- | | **Cash and cash equivalents** | $786,886 | $405,382 | +94.1% | | **Total current assets** | $1,937,991 | $1,308,855 | +48.1% | | **Total assets** | $2,588,365 | $1,965,718 | +31.7% | | **Total current liabilities** | $700,295 | $524,002 | +33.6% | | **Long-term debt** | $444,419 | $443,792 | +0.1% | | **Total stockholders' equity** | $1,305,605 | $850,799 | +53.5% | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operations increased **80% to $527.1 million** for the first nine months of 2021 due to higher net income, while investing activities used **$50.8 million** and financing activities used **$94.8 million** primarily for dividends Consolidated Statements of Cash Flows Highlights (Nine Months Ended Sep 30, in thousands) | Cash Flow Activity | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | **Net cash provided by operations** | $527,091 | $293,771 | +$233,320 | | **Net cash used for investment** | ($50,824) | ($46,431) | +$4,393 | | **Net cash used for financing** | ($94,763) | ($28,642) | +$66,121 | | **Net increase in cash** | $381,504 | $218,698 | +$162,806 | [Condensed Notes to Unaudited Quarterly Consolidated Financial Statements](index=10&type=section&id=Condensed%20Notes%20to%20Unaudited%20Quarterly%20Consolidated%20Financial%20Statements) Detailed notes disclose the company's Wood Products and BMD segments, significant accounting policies, debt, segment performance, and dividend declarations, including a **$3.00 per share supplemental dividend** and significant customer receivable concentrations - The company operates through two reportable segments: Wood Products (manufactures EWP and plywood) and Building Materials Distribution (BMD, a wholesale distributor)[27](index=27&type=chunk) - A significant concentration of credit risk exists, with two customers accounting for approximately **19% and 12% of total receivables** at September 30, 2021[49](index=49&type=chunk) - On October 28, 2021, the board declared a quarterly dividend of **$0.12 per share** and a supplemental dividend of **$3.00 per share**, payable on December 15, 2021[90](index=90&type=chunk) Segment Operating Income (in thousands) | Segment | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Wood Products** | $122,056 | $66,035 | $432,869 | $86,872 | | **Building Materials Distribution** | $16,565 | $107,901 | $343,122 | $180,413 | | **Total Segment Operating Income** | $138,621 | $173,936 | $775,991 | $267,285 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2021 operating income decline to **$129.4 million**, driven by a **$91.3 million decrease** in BMD segment income due to falling commodity prices, partially offset by a **$56.0 million increase** in Wood Products income from higher prices, while maintaining **$1.13 billion** in liquidity [Executive Overview](index=24&type=section&id=Executive%20Overview) Q3 2021 income from operations decreased to **$129.4 million**, as a **$56.0 million increase** in Wood Products income was offset by a **$91.3 million decrease** in BMD income due to falling commodity prices, with the company maintaining **$1.13 billion** in total liquidity - Wood Products segment income increased by **$56.0 million** in Q3 2021 YoY, driven by higher sales prices for EWP, plywood, and lumber[110](index=110&type=chunk) - BMD segment income decreased by **$91.3 million** in Q3 2021 YoY, primarily due to a gross margin decrease of **$100.5 million** from a sharp decline in commodity prices[110](index=110&type=chunk) - The company maintained total available liquidity of **$1,132.2 million** at the end of Q3 2021[111](index=111&type=chunk) [Our Operating Results](index=27&type=section&id=Our%20Operating%20Results) Q3 2021 total sales increased **18% to $1.88 billion**, with Wood Products sales up **37%** due to higher prices, and BMD sales up **20%** despite its gross margin falling from **16.4% to 7.9%** due to declining commodity prices Sales Growth by Segment (Q3 2021 vs Q3 2020) | Segment | Q3 2021 Sales (millions) | Q3 2020 Sales (millions) | Growth | | :--- | :--- | :--- | :--- | | **Wood Products** | $497.3 | $363.7 | +37% | | **Building Materials Distribution** | $1,721.2 | $1,437.7 | +20% | - The increase in Wood Products sales was driven by higher average net selling prices for plywood (**+31%**), LVL (**+23%**), and I-joists (**+27%**)[127](index=127&type=chunk) - BMD's gross margin percentage fell to **7.9%** in Q3 2021 from **16.4%** in Q3 2020, primarily due to a sharp decline in commodity prices during the quarter[123](index=123&type=chunk)[140](index=140&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q3 2021 with **$786.9 million in cash** and **$1.13 billion in total liquidity**, with net cash from operations increasing to **$527.1 million** for the first nine months, while projecting **$90-$100 million** in 2021 capital expenditures and using **$94.8 million** for financing activities, mainly dividends Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by operations** | $527,091 | $293,771 | | **Net cash used for investment** | ($50,824) | ($46,431) | | **Net cash used for financing** | ($94,763) | ($28,642) | - Capital expenditures are expected to be approximately **$90 million to $100 million** in 2021 and are forecasted to increase to **$100 million to $130 million** in 2022[154](index=154&type=chunk) - During the first nine months of 2021, the company paid **$91.0 million** in common stock dividends[155](index=155&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its exposure to market risk, which continues to include commodity prices, interest rates, and foreign currency exchange rates, from those disclosed in its 2020 Form 10-K - As of September 30, 2021, there have been no material changes in the company's exposure to market risk, which includes commodity prices, interest rates, and foreign currency exchange rates[168](index=168&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes in internal control over financial reporting during the third quarter - The CEO and CFO concluded that as of September 30, 2021, the company's disclosure controls and procedures were effective at a reasonable assurance level[169](index=169&type=chunk) - No changes occurred during Q3 2021 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[169](index=169&type=chunk) [PART II—OTHER INFORMATION](index=36&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, none of which are believed by management to have a material adverse effect on its financial position, results, or cash flows - The company states that it is not reasonably possible that any current legal actions will have a material adverse effect on its financial position, results of operations, or cash flows[171](index=171&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) New and updated risk factors include potential adverse impacts from proposed federal COVID-19 vaccination or testing mandates, which could increase costs and disrupt operations, and the potential for tax reform legislation, such as an increased U.S. corporate income tax rate, to adversely affect financial position - A new risk factor is the proposed regulation requiring mandatory COVID-19 vaccination or testing for employees, which could increase costs, interrupt operations, and increase employee turnover[173](index=173&type=chunk)[174](index=174&type=chunk) - The company identifies potential tax reform, such as a proposed increase in the U.S. corporate income tax rate, as a risk that could adversely impact its financial results[175](index=175&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[175](index=175&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act and Inline XBRL data files - Exhibits filed include CEO/CFO certifications (302 and 906) and Inline XBRL documents[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)

Boise Cascade Company (NYSE:BCC) Q2 2021 Earnings Conference Call August 3, 2021 11:00 AM ET Company Participants Kelly Hibbs - Senior Vice President, Chief Financial Officer and Treasurer Nate Jorgensen - Chief Executive Officer Mike Brown - Head, Wood Products Operations Jeff Strom - Head, Building Materials Distribution Conference Call Participants Jesse Barone - BMO Capital Markets Charles Perron - Goldman Sachs Reuben Garner - The Benchmark George Staphos - Bank of America Operator Good morning. My nam ...