Boise Cascade(BCC) - 2025 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Financial Statements The company reported a significant decrease in net income for the second quarter and first half of 2025 compared to the same periods in 2024 Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales | $1,740.1M | $1,797.7M | $3,276.6M | $3,443.1M | | Income from operations | $80.5M | $147.0M | $135.0M | $280.0M | | Net income | $62.0M | $112.3M | $102.3M | $216.4M | | Diluted EPS | $1.64 | $2.84 | $2.69 | $5.44 | Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $481.0M | $713.3M | | Total current assets | $1,911.1M | $1,886.1M | | Total assets | $3,445.5M | $3,369.4M | | Long-term debt, net | $444.9M | $446.2M | | Total stockholders' equity | $2,152.1M | $2,151.3M | Consolidated Statements of Cash Flows Highlights (Unaudited, Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operations | $4.7M | $169.2M | | Net cash used for investment | ($122.1M) | ($76.7M) | | Net cash used for financing | ($114.8M) | ($120.0M) | | Net decrease in cash | ($232.2M) | ($27.5M) | Nature of Operations and Consolidation Boise Cascade is a major North American producer of engineered wood products and plywood, and a leading U.S. building products distributor - The company is one of the largest producers of EWP and plywood in North America[29] - Business is structured into two primary segments: Wood Products (manufacturing) and Building Materials Distribution (wholesale distribution)[30] Debt In April 2025, the company secured a new $450 million revolving credit facility maturing in 2030, replacing its prior asset-based facility - On April 14, 2025, the company entered into a new Credit Agreement providing a $450 million revolving credit facility (the Revolver) maturing in 2030[64] - Proceeds from the new Revolver were used to repay the $50.0 million term loan under the prior credit agreement, which was terminated[68] Long-Term Debt Composition (in millions) | Debt Instrument | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Revolving credit facility due 2030 | $50.0 | $0.0 | | 4.875% senior notes due 2030 | $400.0 | $400.0 | | Asset-based credit facility term loan due 2027 | $0.0 | $50.0 | | Total Long-term debt | $444.9 | $446.2 | Stockholders' Equity The company continued its capital return program through dividends and stock repurchases - During the first six months of 2025, the company repurchased 837,352 shares for $86.0 million at an average price of $102.72 per share[95] - As of June 30, 2025, 970,864 shares remained available for repurchase under the authorized program[95] - On July 31, 2025, the board of directors declared a quarterly dividend of $0.22 per share, payable on September 17, 2025[91] Segment Information For Q2 2025, Wood Products segment income fell sharply to $14.0 million from $72.8 million in Q2 2024 due to lower prices and volumes Segment Income from Operations (in millions) | Segment | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Wood Products | $14.0 | $72.8 | $31.7 | $144.0 | | Building Materials Distribution | $78.0 | $85.4 | $126.5 | $157.9 | | Total Income from operations | $80.5 | $147.0 | $135.0 | $280.0 | Sales to External Customers by Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Wood Products | $125.2 | $142.5 | $254.6 | $282.9 | | Building Materials Distribution | $1,614.9 | $1,655.2 | $3,022.0 | $3,160.2 | | Total Sales | $1,740.1 | $1,797.7 | $3,276.6 | $3,443.1 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the Q2 2025 income decline to lower EWP and plywood prices and higher Wood Products conversion costs, partly from mill modernization Executive Overview Income from operations for Q2 2025 was $80.5 million, a sharp decline from $147.0 million in Q2 2024 - Q2 2025 income from operations was $80.5 million, compared to $147.0 million in Q2 2024[113] - The Wood Products segment income decreased by $58.8 million, primarily due to lower EWP and plywood sales prices and higher conversion costs related to mill modernization projects[113] - The BMD segment income decreased by $7.4 million, driven by increased selling, distribution, and depreciation expenses[113] - The company ended Q2 2025 with $481.0 million in cash and $395.2 million in undrawn credit, totaling $876.2 million in available liquidity[114] Our Operating Results Total sales for Q2 2025 decreased 3% year-over-year to $1.74 billion, driven by lower prices and volumes in the Wood Products segment - Total sales decreased by 3% in Q2 2025 and 5% in the first six months of 2025 compared to the prior year periods, primarily due to changes in sales prices and volumes[122] - Wood Products sales (including intersegment) fell 9% in Q2 2025, driven by lower sales prices for EWP (LVL -10%, I-joists -8%) and decreased plywood sales volumes (-7%) and prices (-6%)[123] - BMD sales decreased 2% in Q2 2025, with commodity sales down 5% and EWP sales down 12%, partially offset by a 4% increase in general line product sales[126] - Selling and distribution expenses increased by 8% in Q2 2025, mainly due to higher employee-related expenses[132] Liquidity and Capital Resources The company ended Q2 2025 with $481.0 million in cash, a decrease of $232.2 million since year-end 2024 - Ended Q2 2025 with $481.0 million of cash and cash equivalents and $876.2 million of total available liquidity[146] - Net cash provided by operations for the first six months of 2025 was only $4.7 million, a significant decrease from $169.2 million in the same period of 2024, primarily due to lower income and a larger increase in working capital[150] - Capital expenditures for the first six months of 2025 were $132.3 million, up from $74.1 million in the prior year period. Full-year 2025 capital expenditures are projected to be between $220 million and $240 million[152][153] - Financing activities in the first half of 2025 used $114.8 million, including $86.0 million for share repurchases and $18.4 million for dividends[155] Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in market risk exposure, including commodity prices, interest rates, and foreign currency, from its 2024 Form 10-K disclosures - As of June 30, 2025, there have been no material changes in the company's exposure to market risk from the disclosures in the 2024 Form 10-K[167] Controls and Procedures The company's CEO and CFO concluded that as of June 30, 2025, the disclosure controls and procedures were effective - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[168] - No changes occurred during Q2 2025 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[169] PART II—OTHER INFORMATION Legal Proceedings The company is involved in ordinary course legal proceedings, but expects no material adverse effect on its financial position or results - The company does not expect any current legal proceedings to have a material adverse effect on its financial condition or results of operations[171] Risk Factors This section refers to risk factors in the 2024 Form 10-K, noting no material changes or new significant risks this quarter - The report refers to the risk factors previously disclosed in the company's 2024 Form 10-K[173] Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, Boise Cascade repurchased 354,652 shares for $32.1 million at an average price of $90.59 per share under its authorized program Share Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Remaining for Purchase | | :--- | :--- | :--- | :--- | | April 2025 | 179,445 | $94.10 | 1,146,071 | | May 2025 | 63,756 | $88.22 | 1,082,315 | | June 2025 | 111,451 | $86.29 | 970,864 | | Q2 Total | 354,652 | $90.59 | 970,864 |