Boise Cascade(US:BCC)2025-11-03 21:30Financial Performance - Income from operations decreased to $32.3 million for Q3 2025, down from $117.4 million in Q3 2024, primarily due to lower engineered wood products (EWP) and plywood sales prices and volumes [116]. - Wood Products segment reported a loss of $12.1 million in Q3 2025 compared to an income of $53.9 million in Q3 2024, attributed to higher per-unit conversion costs [116]. - Building Materials Distribution (BMD) segment income decreased by $20.5 million to $54.3 million in Q3 2025 from $74.8 million in Q3 2024, driven by a gross margin decrease of $10.6 million [116]. - Total sales for Q3 2025 were $1.67 billion, a decrease from $1.71 billion in Q3 2024, with Wood Products sales at $396.4 million and BMD sales at $1.56 billion [123]. - Total sales for the three months ended September 30, 2025, decreased by $45.9 million, or 3%, to $1,667.8 million compared to $1,713.7 million for the same period in 2024 [124]. - For the nine months ended September 30, 2025, total sales decreased by $212.4 million, or 4%, to $4,944.4 million from $5,156.8 million for the same period in the prior year [124]. - Wood Products segment sales decreased by $57.5 million, or 13%, to $396.4 million for the three months ended September 30, 2025, driven by lower sales prices for LVL and I-joists [125]. - For the nine months ended September 30, 2025, Wood Products segment sales decreased by $153.2 million, or 11%, to $1,259.5 million compared to $1,412.6 million for the same period in the prior year [126]. - Building Materials Distribution sales decreased by $11.3 million, or 1%, to $1,556.2 million for the three months ended September 30, 2025, with commodity sales decreasing by 3% [128]. - Income from operations decreased by $85.0 million to $32.3 million for the three months ended September 30, 2025, compared to $117.4 million for the same period in 2024 [138]. - For the nine months ended September 30, 2025, income from operations decreased by $229.9 million to $167.4 million from $397.3 million for the same period in 2024 [138]. - Segment income for Wood Products decreased by $178.2 million to $19.6 million for the nine months ended September 30, 2025, due to lower sales prices and volumes [140]. - Interest income decreased by $6.0 million to $4.2 million for the three months ended September 30, 2025, from $10.2 million for the same period in the prior year [144]. Market Conditions - U.S. housing starts for single-family homes fell to 165.9 thousand in Q3 2025 from 259.8 thousand in Q3 2024, indicating a decline in residential construction activity [123]. - The company anticipates a cautious market in the first half of 2026, with gradual improvement expected later in the year due to potential interest rate cuts [118]. Liquidity and Cash Flow - The company ended Q3 2025 with total available liquidity of $907.0 million, consisting of $511.8 million in cash and cash equivalents and $395.2 million in undrawn committed bank lines [117]. - Cash provided by operations for the nine months ended September 30, 2025, was $123.1 million, a decrease of $220.6 million compared to $343.8 million in the same period in 2024 [153]. - Working capital increased by $122.8 million during the nine months ended September 30, 2025, compared to a $94.1 million increase in the same period in 2024 [153]. - The company used $176.4 million for investment activities during the nine months ended September 30, 2025, compared to $140.1 million in 2024 [152]. - Financing activities used $148.2 million of cash in the nine months ended September 30, 2025, including $111.0 million for stock repurchases and $26.6 million in dividends [157]. - The company repurchased 1,128,752 shares of common stock during the nine months ended September 30, 2025 [157]. - As of September 30, 2025, the company had $511.8 million in cash and cash equivalents and $450.0 million in debt, resulting in $907.0 million of available liquidity [148]. - As of September 30, 2025, the company had $50.0 million of borrowings outstanding under a $450.0 million revolving credit facility [157]. Capital Expenditures and Future Plans - Capital spending and treasury stock purchases contributed to a cash outflow of $201.5 million during the nine months ended September 30, 2025 [117]. - The company plans to take capital project and maintenance-related downtime at certain manufacturing facilities in Q4 2025 to align production rates with market demand [119]. - Capital expenditures for 2025 are expected to total approximately $230 million to $250 million, with a range of $150 million to $170 million projected for 2026 [156]. Employee Relations - Approximately 17% of the company's employees work under collective bargaining agreements, with potential labor disruptions if agreements are not renewed [163]. Acquisitions - On July 1, 2025, James Hardie Industries plc completed the acquisition of The AZEK Company Inc., which is expected to have no material adverse impact on the company's distribution arrangements [147]. Sales Performance - The company experienced a 15% increase in sales for September 2025 compared to September 2024, and a 9% increase compared to December 2024 [154].