Financial Data and Key Metrics Changes - Consolidated second quarter sales were $2.3 billion, down 7% from the second quarter of 2021 [7] - Net income was $218.1 million or $5.49 per share, compared to $302.6 million or $7.63 per share in the prior year quarter [7] - Total U.S. housing starts increased 3% compared to the same period last year, with multifamily starts driving the increase [8] Business Line Data and Key Metrics Changes - Wood Products reported segment EBITDA of $167.8 million, down from $227.9 million in the year-ago quarter, impacted by lower plywood sales prices and higher per unit costs [8][10] - Building Materials Distribution (BMD) reported segment EBITDA of $161 million on sales of $2.1 billion, compared to $212.3 million on sales of $2.2 billion in the prior year quarter [8][11] - BMD sales were down 2% from the second quarter of 2021, driven by a sales volume decrease of 4% offset partially by a sales price increase of 2% [13] Market Data and Key Metrics Changes - Plywood sales volumes decreased to 281 million feet from 338 million feet in the second quarter of 2021, primarily due to downtime related to facility upgrades and staffing shortages [12] - Average plywood net sales price was $569 per 1000 feet, down 35% from the second quarter of 2021 and down 17% sequentially [12] Company Strategy and Development Direction - The company completed the acquisition of Coastal Plywood for $517 million, which is expected to enhance production capacity and support housing construction in the Southern and Eastern U.S. [18][19] - The acquisition is anticipated to be EPS accretive in 2022, with a mid-cycle EBITDA benefit of approximately $80 million once fully integrated [19][20] - The company plans to focus on integrating Coastal Plywood operations and expanding EWP production capacity [22] Management's Comments on Operating Environment and Future Outlook - The company expects a slowdown in new residential construction in the second half of 2022 due to home affordability constraints and a weakening economy [21] - Despite potential economic downturns, the company remains optimistic about long-term housing demand and plans to continue supporting growth through strategic investments [22][23] - Management highlighted the importance of managing inventory levels and maintaining margins in a potentially challenging economic environment [34][82] Other Important Information - The company finished the second quarter with $1 billion in cash and total available liquidity of approximately $1.4 billion [15] - A quarterly dividend of $0.12 per share was approved, along with a share repurchase program authorization for an additional 1.5 million shares [17] Q&A Session Summary Question: Sustainability of EWP pricing in a slowing macro environment - Management indicated that EWP pricing may come under pressure in the forthcoming quarters, but remains robust for the near term [26][27] Question: Trajectory of BMD margins in a stable pricing environment - Management noted that margins have held up well in July and expect some normalization but above historical levels as they continue to execute their strategy [28][29] Question: Supply-demand tension in distribution products - Management described a mixed bag in supply-demand dynamics, with some products still under tension while others are easing [36][37] Question: Labor issues and their impact - Labor availability remains challenging, particularly in manufacturing, with some improvement in applications but specific roles like truck drivers still difficult to fill [42][43] Question: Impact of Coastal acquisition on future capacity and operations - Management confirmed that the acquisition will enhance production capabilities and allow for better market positioning, particularly in EWP [48][56]

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)