Housing Market Trends - The housing market is undergoing a recalibration period after the pandemic boom, with a shift in the supply-demand equilibrium towards buyers [7][16] - A bifurcation exists in the housing market, with Sun Belt and Mountain West areas experiencing more softening compared to the Midwest and Northeast [19][20] - Existing home sales are approximately 13 million below the normal trend, indicating a significant constraint in the purchase side of the mortgage market [35] - Refinance activity is also experiencing a three-year drought, coinciding with the low purchase side, making it a tough period for the mortgage industry [42] Builder Strategies and Margins - During the pandemic, builders had significant pricing power and record profit margins, but they have since compressed margins to entice buyers [3][4][5] - Builders initially used mortgage rate buydowns as a successful lever, but are now resorting to outright price cuts in some areas like Florida and Texas [6][8] - Builder margins have seen compression year-over-year among the top 11 publicly traded home builders, although many still exceed pre-pandemic levels [10] - Some builders are choosing to protect margins by pulling back on the overall number of sales, leading to a softening in single-family housing starts [11] Factors Influencing the Market - The deceleration of migration to Sun Belt areas means local incomes must now support prices, which are detached from underlying incomes [21][22][23] - The "lock-in effect," where homeowners are hesitant to give up lower mortgage rates, is impacting both supply and demand in different regions [28][31] - Tariffs have not had a significant impact on build costs, as only 7% of residential construction materials are imported, and some key materials were excluded from tariffs [13][14][15] Open Door Analysis - Open Door overpaid for homes in boomtown markets and faces challenges in the higher interest rate environment with less housing market churn [45] - There is skepticism about the long-term viability of Open Door's core I-buying business, but opportunities exist for the company to leverage its scale and attention to move into other business avenues [45][46]

Financial Data and Key Metrics Changes - Consolidated second quarter sales were $1.7 billion, down 3% from 2024 [6] - Net income was $62 million or $1.64 per share, compared to $112.3 million or $2.84 per share in the prior year quarter [6] - Included in the results were a $7.7 million pre-tax gain on asset sales [6] Business Line Data and Key Metrics Changes - Wood Products sales were $447.2 million, down 9% year-over-year, with segment EBITDA of $37.3 million compared to $95.1 million in the prior year [9] - Building Material Distribution (BMD) sales were $1.6 billion, down 2% year-over-year, with segment EBITDA of $91.8 million compared to $97.1 million in the prior year [11] - LVL volumes increased by 818% year-over-year, while I-joist volumes decreased by 5% [12] Market Data and Key Metrics Changes - U.S. housing starts and single-family housing starts decreased by 18% compared to the prior year quarter [6] - Plywood sales volume was 356 million feet, down from 383 million feet in the prior year quarter [13] - BMD's gross margin was 15.4%, a 60 basis point year-over-year improvement [11] Company Strategy and Development Direction - The company is focused on addressing near-term challenges while maintaining service standards [8] - Investments are being made to drive sustainable growth, supported by strong structural demand drivers in residential construction [8] - The modernization project at the Oakdale Mill is substantially complete, enhancing operational efficiency [7] Management's Comments on Operating Environment and Future Outlook - Management expects headwinds for residential construction activity to persist [19] - Anticipated third quarter EBITDA for Wood Products is estimated between $20 million and $30 million [19] - Long-term demand drivers for residential construction remain robust, supported by demographic trends [23] Other Important Information - Capital expenditures for the first half of 2025 were $132 million, with a capital spending range for 2025 unchanged at $220 million to $240 million [15] - The company paid $18 million in regular dividends and repurchased approximately $96 million of common stock in 2025 [17] Q&A Session Summary Question: What has driven the performance gap between LVL and I-joist volumes? - Management noted that LVL has better resiliency due to diverse application opportunities, while I-joist is more limited [27] Question: How do you see EWP pricing going forward? - Management indicated that operating rates were in the low 80s for EWP, with expectations of a potential decline in rates depending on demand [52] Question: Can you provide an update on the strike at the Billings facility? - The strike involves 19 employees and is limited to one of the 38 BMD locations, with no anticipated material impact [55]