Boise Cascade Fourth Quarter 2025 Earnings Call - EWP Prices Stabilize, Distribution Growth Offsets Legal Charge and Margin Pressure

Kelly Hibbs, Chief Financial Officer, Boise Cascade: My name is Rocco, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascade’s fourth quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. Please note, today’s event is being recorded. I would now like to turn the conference over to Chris Forrey, Senior Vice President, Finance and Investor Relations. Mr. Forrey, you may begin your conference.

Chris Forrey, Senior Vice President, Finance and Investor Relations, Boise Cascade: Thank you, Rocco, and good morning, everyone. We’d like to welcome you to Boise Cascade’s 4th quarter 2025 earnings call and business update. Joining me on today’s call are Nate Jorgensen, our retiring CEO, Jeff Strom, our incoming CEO, Kelly Hibbs, our CFO, Jo Barney, leader of our Building Materials Distribution operations, and Troy Little, leader of our Wood Products operations. Turning to slide 2. This call will contain forward-looking statements. Please review the warning statements in our press release, on the presentation slides, and in our filings with the SEC regarding the risks associated with these forward-looking statements. Please note that the appendix includes reconciliations from our GAAP net income to EBITDA and adjusted EBITDA and segment income or loss to segment EBITDA. I will now turn the call over to Nate.

Nate Jorgensen, Retiring CEO, Boise Cascade: Thanks, Chris. Good morning, everyone, and thank you for joining us for our earnings call. Slide number 3. As I reflect on 2025, I want to begin by recognizing the dedication and perseverance of every Boise Cascade associate. Our people and shared values continue to be the foundation of our sustained success. We delivered strong operating results despite ongoing market headwinds, with full-year net income of $132.8 million, or $3.53 per share. We continue to expand our distribution business, the most notable examples being the opening of our Greenfield Distribution Center in Conroe, Texas, and the 4th quarter acquisition of Holden Humphrey. Our multi-year investments in support of our EWP production capabilities in the Southeast remained a strategic focus in 2025. We completed the Oakdale modernization project and are substantially complete with the addition of the Thorsby line.

The meaningful investments we have made in the last three years position us to deliver above-market growth in the years to come. Lastly, we provided meaningful returns to our shareholders again in 2025, through a 5% increase in our quarterly dividend and more than $180 million of share repurchases. Turning to fourth quarter results, total U.S. housing starts, single-family housing starts increased 4% and 7%, respectively, compared to the prior year quarter. Our consolidated fourth-quarter sales of $1.5 billion were down 7% from the fourth quarter of 2024. Our net income was $8.7 million, or $0.24 per share, compared to net income of $68.9 million, or $1.78 per share in the year-ago quarter.

Fourth quarter 2025 results were negatively impacted by approximately $6 million, or $0.16 per share after tax, related to accrual for legal proceedings in our BMD segment that Kelly will address in his comments. As expected, sequential volume declines in both divisions reflected the seasonal softness and demand. In BMD, our team delivered steady gross margin sequentially. In wood products, EWP prices stabilized, while plywood markets, like other commodities, continued to experience weak pricing due to soft demand. Despite market challenges, we delivered solid earnings for the quarter. As announced in December, I will retire next week after 10 years with Boise Cascade, including six as CEO. It’s been an honor and privilege to serve in this role. Jeff’s transition into the CEO role reflects our deliberate and purposeful succession planning.

I have great confidence in Jeff and the entirety of our leadership team to guide Boise Cascade’s continued success. I look forward to continued service on the company’s board. Kelly will now walk through our segment financial results, capital allocation priorities, and the first quarter guidance. Jeff will provide highlights on our business outlook and make closing comments before we open the call for questions. Kelly?

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Thank you, Nate. Good morning, everyone. BMD sales in the quarter were $1.4 billion, down 5% from fourth quarter in 2024. BMD reported segment EBITDA of $56.4 million in the fourth quarter, compared to segment EBITDA of $84.5 million in the prior year quarter. Gross margin dollars decreased $21.3 million compared to fourth quarter 2024. BMD’s fourth quarter EBITDA was negatively impacted by the $6 million charge that I will speak to in more detail momentarily. In wood products, our sales in the fourth quarter, including sales to our distribution segment, were $354 million, down 16% compared to fourth quarter 2024. Wood products segment EBITDA was $12.3 million, compared to EBITDA of $56.6 million reported in the year-ago quarter.

The decrease in segment EBITDA was due primarily to lower EWP sales prices and sales volumes, as well as lower plywood sales prices and higher per unit conversion costs that were influenced by decreased production rates. Moving to slides 5 and 6. BMD’s year-over-year fourth quarter sales decline of 5% was driven by a 4% decrease in sales prices, as well as a 1% decrease in sales volumes. By product line, commodity sales decreased 9%, general line product sales increased 3%, and sales of EWP decreased 14%. Sequentially, BMD’s sales were down 12% from third quarter 2025, a result of lower volumes attributable to seasonally weaker demand. Our fourth quarter gross margin was 15.1%, flat sequentially and down 70 basis points year-over-year. The year-over-year decline was driven by commodity price headwinds and EWP competitive pricing pressures.

Margins on general line products were stable despite the subdued demand environment. BMD’s EBITDA margin was 4.1% for the quarter, down from both the 5.9% reported in the year-ago quarter and the 4.5% reported in the third quarter. Sequentially, our EBITDA margin improved modestly when excluding the negative impact of the previously mentioned charge. BMD’s fourth quarter EBITDA margin is below our typical earnings power. However, it represents strong performance considering current market demand and pricing conditions. This outcome demonstrates our team’s effective execution across all product lines. In particular, we have prioritized growth in our general line products, leveraging our proven track record and extensive distribution network to offer a leading selection in this category. Now, I want to spend a moment specific to the legal matter related to the $6 million charge recorded in BMD.

This relates to a Lacey Act investigation involving plywood purchases at our distribution facility in Pompano, Florida. It is a legacy matter pertaining to certain hardwood plywood purchases made between 2017 and 2021, sourced from a former U.S.-based supplier and that supplier’s importation of plywood. That investigation led to Boise Cascade receiving a subpoena for documents in 2024, and we have fully cooperated with federal authorities, specifically the Department of Justice. I want it to be clear that we take this matter very seriously, consistent with our company values. We are committed to maintaining rigorous compliance standards across our businesses. In fact, years prior to being contacted by federal regulators, we had already undertaken steps to comprehensively review, invest in, and enhance our compliance programs.

Steps taken included a new compliance management and oversight program, implementation of enhanced policies and procedures related to supplier due diligence and monitoring, and mandated education programs and trainings for our associates. In short, we have a comprehensive compliance program in place. The charge we recorded and the matter the DOJ is reviewing relate to transaction at only 1 distribution facility several years ago. We are confident that we have implemented effective processes to meet our compliance obligations. We will continue to cooperate with the DOJ to resolve this matter as soon as possible and move forward as a stronger company with an even greater vigilance toward trade policies and procedures. Lastly, I want to emphasize that this does not impact our operations. We remain focused on delivering exceptional value to our customer and supplier partners. Turning to slide 7.

Fourth quarter I-joist and LVL volumes were down 16% and 7%, respectively, compared to the year-ago quarter. Sequential I-joist and LVL volumes were down 16% and 8%, respectively, as seasonal declines in construction activity and a continued muted demand environment drove lower volumes. On a year-to-date basis, our I-joist and LVL volumes were down 8% and 2%, respectively, a reflection of the decrease in single-family starts. As it relates to pricing, fourth quarter EWP sales prices declined about 10% year-over-year, but were flat sequentially. Turning to slide 8. Our fourth quarter plywood sales volume was 354 million feet, compared to 371 million feet in fourth quarter 2024. Sequentially, our plywood sales volumes were down 9% from third quarter 2025, as anticipated due to the seasonal slowing in demand.

The $329 per thousand average plywood net sales price in the fourth quarter was down 6% on a year-over-year basis, increased modestly compared to third quarter 2025. Tariffs have led to a notable decrease in South American plywood imports to the U.S., with Brazilian shipments falling over 40% year-over-year in the latter half of 2025. This reduction has contributed to recent pricing gains for Southern Plywood. Trade policy remains uncertain following last week’s Supreme Court decision, it will be important to watch how these developments affect market dynamics in the months ahead. I’m now on slide 9. We had capital expenditures of $241 million in 2025, with $105 million of spending in BMD and $136 million of spending in Wood Products.

As Nate previously mentioned, this capital deployment was in alignment with our strategy to solidify and expand our market-leading national distribution presence and support our EWP production capabilities in the Southeast. Looking forward to 2026, we expect our capital spending to be between $150 million and $170 million. Roughly a third of BMD’s 2026 spending relates to growth projects across our system, with the balance of our spending in both segments attributable to replacement projects, business improvement and efficiency projects, and ongoing environmental compliance. Speaking to shareholder returns, we paid $35 million in regular dividends in 2025. Our board also recently approved a $0.22 per share quarterly dividend on our common stock that will be paid in mid-March. In 2025, we repurchased approximately $181 million of Boise Cascade common stock, including approximately $70 million in the fourth quarter.

Thus far in the first quarter of 2026, we have repurchased an additional $39 million, leaving approximately $200 million authorized for repurchase under our existing share repurchase program. We remain committed to a balanced approach to capital allocation by investing in our assets, pursuing organic and inorganic growth opportunities, and returning capital to our shareholders. Our strong financial position provides flexibility to advance all of these priorities for long-term value creation. I’m now on slide 10, where we have presented a range of potential EBITDA outcomes for the first quarter, along with key driver assumptions. Notably, Winter Storm Fern had a considerable effect at the beginning of the quarter, causing widespread disruptions throughout our operations in the Eastern U.S. Within BMD, nearly 20 branches were closed for at least one day, resulting in approximately 30 lost sales days.

Additionally, our Southeast manufacturing facilities experienced closures lasting multiple days, and just this week, severe weather in the Northeast is again impacting our distribution operations. With that as a backdrop, I’ll shift to our outlook. For BMD, we currently estimate first quarter EBITDA to be between $45 million and $55 million. BMD’s current daily sales pace is approximately 6% below the fourth quarter sales pace of $22 million per day. While we expect our first quarter pace to improve as the quarter progresses, it will likely fall short of the fourth quarter pace. Gross margins are expected to be between fourteen and a quarter and 15%. For wood products, we estimate first quarter EBITDA to be between $25 million and $35 million. We expect EWP volumes to increase by high single to low double digits sequentially, reflecting seasonal strengthening and channel restocking in advance of spring building season.

EWP pricing is expected to range from flat to low single-digit declines sequentially. In plywood, we expect sequential volume increases in the high single digits. On plywood pricing, quarter-to-date realizations were 1% above our 4th quarter average, with the balance of the quarter market dependent. Increases in EWP and plywood volumes will also drive sequential decreases in our per unit manufacturing costs. Lastly, we expect our 1st quarter effective tax rate to be between 26% and 27%. I will now turn it over to Jeff to share our business outlook and closing remarks.

Jeff Strom, Incoming CEO, Boise Cascade: Thank you, Kelly. I want to start by welcoming the talented team from Holden Humphrey to Boise Cascade. We are excited to have completed that acquisition this past December and how it enhances our footprint and product offering in the Northeast region. Let me turn to slide 11. As we move into 2026, maintaining focus and adaptability will be crucial to differentiating Boise Cascade and delivering value for our customers and supplier partners. In 2025, single-family starts fell short of 2024 levels by approximately 7% and are expected to be flat or modestly down in 2026. Home builders moderated starts in 2025 to avoid further build up of finished home inventory, as affordability remains a persistent challenge for prospective homebuyers. Throughout 2025, builders bridged the supply-demand gap with increased incentives and high single-digit declines in new home prices.

Multifamily experienced growth in 2025, but starts are expected to level off in 2026 due to prohibitive capital costs for developers, combined with low rent growth and a decrease in permit activity. In repair and remodeling, activity has been limited by low home turnover and homeowners delaying major projects due to high borrowing costs and economic uncertainty. However, as economic policy becomes clear, consumer confidence improves, and interest rates decline, the project backlog positions repair and remodeling for a long runway of growth. The strong fundamentals for both new residential construction and repair and remodeling continue to support the industry’s favorable outlook. Our recent investments position Boise Cascade to capture significant upside as the market turns. BMD once again demonstrated its value to the channel, delivering outstanding service across a broad range of industry-leading building materials.

We’re prepared for new opportunities and challenges that lie ahead in 2026, but one constant will be BMD’s unwavering focus on creating solutions for our customers. In wood products, we are pleased that EWP price erosion abated in the fourth quarter, and we aim to improve EWP realizations as the year progresses. The integration of our two business segments has never been closer. Enhanced channel visibility supports the alignment of our production rates and inventory strategies with end market demand. Cross-divisional efficiencies and our solid financial foundation are cornerstones of our ability to execute our strategy and deliver long-term value creation. Looking ahead, we remain confident in the long-term demand drivers for residential construction, including the persistent undersupply of housing, an aging U.S. housing stock, and high levels of homeowner equity.

Generational tailwinds support household formation growth, while declines in mortgage rates should encourage buyers who have been waiting on the sidelines to enter the market. Finally, I’d like to thank Nate for his steadfast leadership and dedication to Boise Cascade. Nate’s tenure as CEO began shortly before the COVID-19 pandemic, and his steady hand and thoughtful leadership guided us through the wild swings in the market that followed. We are a stronger company today because of his leadership, and I’m pleased that Nate will continue to serve on our board of directors. The example Nate has set for me and many others at Boise Cascade is one of living our values. Nate’s embodiment of these values has become a fundamental building block of our culture that has strengthened our relationships with associates, customers, suppliers, and shareholders. Nate, I wish you and your family the very best in retirement.

Thank you for joining us today and for your continued support and interest in Boise Cascade. We welcome any questions at this time. Rocco, would you please open the phone lines?

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Yes, sir. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Today’s first question comes from Susan Maklari with Goldman Sachs. Please go ahead.

Jeff Strom, Incoming CEO, Boise Cascade0: Thank you. Good morning, everyone. Nate, let me add my congrats on a job well done over the during your tenure. Jeff, I look forward to working with you.

Jeff Strom, Incoming CEO, Boise Cascade1: Thanks, Sue. Thank you.

Jeff Strom, Incoming CEO, Boise Cascade0: My first question is focused on the general line within BMD. Can you talk about the share gains that you’re continuing to realize there and the ability to continue to grow, even with the housing headwinds that we’re seeing?

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: Yeah. Good morning. This is Jo. What I would tell you is that, you know, we really saw demand held up well across our general line products. You know, in 2025, they were our biggest category. They hit an all-time high as far as our overall mix. We’ve done exactly what we set out to do in growing our general line products. We continue to see solid growth with James Hardie, with Trex, with Huber. In the fourth quarter, our home center business continued to be strong, and we’ve got a lot of program business through the home centers, as well as general line special order business that we do, and we do really well with that business. We believe that’s gonna continue to grow. We see a lot of opportunity, upside opportunity, with the home centers.

We continue to improve and grow our door and millwork category, both in terms of improving our operational costs, as well as growing overall revenue. We really feel confident that we’re gonna continue to gain market share in that category.

Jeff Strom, Incoming CEO, Boise Cascade0: Okay, that’s helpful. Thank you. Then maybe turning to EWP, you know, the builders, the public builders really focused on clearing a lot of their spec inventory in the fourth quarter ahead of the spring selling season. I guess, as we do look to the upcoming season, can you talk about how the channel is positioned in there? With the builders targeting that very low single-digit volume growth, how are you thinking about what that could mean for the business and any potential upside if we do get more of a lift in activity as we go through the next couple of quarters?

Jeff Strom, Incoming CEO, Boise Cascade1: Yeah. Good morning, Sue, this is Troy. Yeah, I mean, obviously, like you mentioned, that we had the kind of destocking effect in Q4, but we, you know, we’re aligned with, you know, strong partners on the builder side and the dealer side. We did see some, if you wanna probably more restocking, starting in at the beginning of Q1. That’s kind of flowed through well into February and, you know, feeling pretty good about where we sit year to date this month. I think just those strong partnerships allows us access to the market when it does come back, you know, through that channel and, with our partnership with BMD, that inventory itself is ready to roll.

Jeff Strom, Incoming CEO, Boise Cascade0: Okay. All right, thank you for that. Then I’m gonna squeeze one more in, which is just, you know, Jeff, as you do step into the CEO role, can you talk about any areas that you’re especially focused on? Maybe within that, any thoughts on capital allocation and priorities there?

Jeff Strom, Incoming CEO, Boise Cascade1: I’ll just start with this one. I think when I look at things overall, you know, our strategic priorities that we have that are in place right now, you know, I think they’ve served us very well. Maybe you might see a slight refinement there of things that’ll work on a more deeper intentionality. The initiatives we put in place will all be just to support that strategy of what it is. You think about what it’s been, you know, leveraging integrated model, you know, it has served us incredibly well. We’re gonna keep doing that and look for more efficiencies there. To increase earnings stability. I love the work that we’ve done, and I think it’s showing up very well right now.

There’s opportunities there, and there’s opportunities to continue to invest and grow our business, and we’re gonna do that in both businesses, you know, BMD and Wood Products. You know, we’re gonna look for innovation, for efficiencies to drive some costs out and then accelerate the pace of transformation. Again, that goes to technology. You know, we want to invest in employing technology there to help drive revenue and reduce costs. One slight addition that I’d add to that, I think, is, you know, we really want to become the employer of choice for our associates. What do I mean by that? You know, we want to attract the best talent. We want to get them in here, you know, to work for a great business with an amazing culture, and we want to keep them there.

We want to develop them, we want to invest in them, and provide a great future. I think those will be the changes. On the capital allocation, truly, I think our balanced approaches work extremely well for us, and I don’t see anything different going forward there.

Jeff Strom, Incoming CEO, Boise Cascade0: Okay. Thank you, and good luck to everyone, and good luck on the quarter.

Jeff Strom, Incoming CEO, Boise Cascade1: Thank you.

Rocco, Conference Facilitator: Thank you. Our next question today comes from Michael Roxland with Truist Securities. Please go ahead.

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: Yeah, thank you, Nate, Jeff, Kelly, Chris, and everyone else for taking my questions. Nate, congrats on your retirement. It’s been great working with you. Appreciate all your insights over the last few years. Jeff, congrats on the new role. Looking forward to working with you more closely.

Jeff Strom, Incoming CEO, Boise Cascade1: Thank you.

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: First question is on EWP prices. They’ve obviously begun to stabilize quarter-over-quarter. Your guides are going to better prices sequentially in 1Q. I realize there may be some seasonality you’re embedding within that guide, is there anything, any other color you could share as to what in particular is driving the EWP price stability after so many quarters of erosion, and particularly in light of persistent single-family weakness? Are you starting to see the competitive backdrop become a little bit more rational relative to the way it was? Just anything you can help us with to describe what’s happening with EWP pricing.

Jeff Strom, Incoming CEO, Boise Cascade1: Yeah, Mike, this is Troy. Yeah, no, I pleasantly surprised in terms of the fourth quarter, being flat relative to Q3. You know, I think where we’re at in the cycle, you know, definitely it’s pretty competitive out there, but I think that’s

...playing itself out. As we move into Q1, we’re seeing, you know, quite honestly, we’re pretty flat, where we sit right now to the second half of last year. You know, that remains encouraging. You know, we obviously are out there, looking for new business and defending what we have, but right now, we’re not anticipating, you know, anything substantially on the downside. Like I said, where we sit in Q1, I’d say that’s probably gonna be fairly flat.

Jeff Strom, Incoming CEO, Boise Cascade2: Got it. Troy, is it just a matter of what? The competitive backdrop being, you know, your peers being more rational in terms of their pricing? You know, I remember you guys highlighted a couple of quarters ago, for a number of quarters, actually, going at this point, that in select markets, you were seeing more EWP price erosions and because of peers being more competitive. Has that subsided, and that’s why now pricing has stabilized?

Jeff Strom, Incoming CEO, Boise Cascade1: I wouldn’t say it’s stopped. It’s definitely out there. It’s an ongoing conversation. You know, I just think it’s kind of where we’ve ended up. I mean, costs throughout the last number of years, as prices have been coming down, our costs have been going up, I just think maybe that’s where we’re at in the cycle.

Jeff Strom, Incoming CEO, Boise Cascade2: Got it. Troy, since I have you, just, you know, the one Q guidance and we’re probably assuming a nice increase in margins sequentially. Aside from pricing that we just spoke about and volumes, can you talk about maybe some of the other underlying assumptions in what products that allow you to have such a notable increase in EBITDA margins sequentially?

Jeff Strom, Incoming CEO, Boise Cascade1: Yeah, I mean, obviously, we had the big project work through the second half of, you know, 2025, and then we had market-related downtime. Anytime you’ve got volume pulling out, you know, your cost structure is even worse. I think with the projects being complete, that downtime, you know, we’ve been running fairly full so far this year with a little bit of market-related. In terms of sequential guidance, I mean, we’ve got that baked in or baked out, maybe is a better way of putting it. Plus, just we’re very focused on what we call our site improvement plans at each one of our facilities. I think, you know, real focus on that will have incremental benefit.

Jeff Strom, Incoming CEO, Boise Cascade2: Got it. One last question, I’ll turn it over. On BMD, it looks like the EBITDA margin should be around 3% to 3.5% to 4% based on your 1Q guidance. What do you guys think could get the business back to 5% margins, which I believe is something you’ve classified as more normal? You know, what do you need to see from a housing perspective or a mixed vantage point or elsewhere to get you back to that 5% bogey? Thank you.

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Yeah, good question, Mike. You know, certainly first quarter is gonna be a seasonally weaker period, and the, the top line is only gonna matter in terms of what kind of gross margin, gross margin dollars we can generate. If we get into the seasonally stronger periods in the second and third quarter, my expectation would be we would be back to that 5% level. You’re right, in the first quarter, it would look softer, and I think it’s important to also comment on the gross margins a bit there in terms of the guide, 14.25%-15%. Couple things to think about there. There’s, mix is a bit different. You’ll see some less general line in EWP in the first quarter.

It’ll be a little heavier to commodity in terms of our overall mix. Additionally, within commodity, there’s been a little bit of energy in the market of late, but there’s been some confidence in the market that our downstream customers have shifted a bit more to direct, and as you know, direct drives a little bit lower margin. There’s kind of a mix overall and a bit of a mix shift within commodity that moves that gross margin % down a little bit lower than you might have expected in the first quarter.

Jeff Strom, Incoming CEO, Boise Cascade2: Got it. Very helpful, Kelly. Congrats, guys, and good luck in the first quarter.

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Thanks, Mike.

Jeff Strom, Incoming CEO, Boise Cascade1: Bye.

Rocco, Conference Facilitator: Thank you. Our next question today comes from George Staphos with Bank of America Securities. Please go ahead.

Kyle Beneduto, Analyst (stepping in for George Staphos), Bank of America Securities: Hi, this is Kyle Beneduto, stepping in for George Staphos. Thank you for taking my question. At IBS, we saw increased promotion of engineered I-joist products, including your SawTek offering, positioned as alternatives to open web trusses. How meaningful are these products in helping you regain share from open web systems, and can you update us on how the competitive dynamics are evolving? Relatedly, given the early year move in lumber prices, how does open web pricing compare to I-joist today? Thank you.

Kelly Hibbs, Chief Financial Officer, Boise Cascade: You bet. A few questions in there I’ll try to hit on, and maybe we’ll spread this around a bit. It sounds like you were at our booth and saw our I-joist, and there was talk around our SawTek system and whatnot. That is absolutely not anything new for us. We’ve been doing a lot of work for a long time around software design, as well as SawTek systems, to have that product show up efficiently at the job site so that it can be quickly installed and help cycle time. That’s nothing new for us.

Then in terms of lumber and lumber pricing and how that could shift market, I would tell you, typically, when you get builders to transition to engineered wood, they don’t shift back to lumber. On the open web side, you know, certainly a competitive product there, and lumber is a key input cost for them. That, you know, that could drive some cost pressure for the open web manufacturers.

Kyle Beneduto, Analyst (stepping in for George Staphos), Bank of America Securities: Thank you. One additional question, I’ll turn it over. For BMD margins, could you just walk us through the key factors that would drive results towards the high end versus the low end of your guidance range for this quarter? What are the major moving pieces that we should be focused on? Thank you, good luck in the quarter.

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Thank you, Ben. Just to clarify, were you talking gross margins or EBITDA margins?

Kyle Beneduto, Analyst (stepping in for George Staphos), Bank of America Securities: EBITDA margins.

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Yeah. A couple things there I would highlight. One, sales velocity really matters, and like I alluded to, we’re 6% below our pace so far. Our pace in the fourth quarter, we’re 6% below. Sales pace really matters to generate more gross margin dollars for us. Mix shift. Mix shift is going to matter as well in terms of how much general line, how much commodity, how much EWP, and I would expect our mix to maybe richen a bit as we make our way through the balance of the quarter. Like I alluded to earlier, we’ve been fairly heavy on directs on the commodity side of the business.

To get maybe towards that top end of the margin that I, that we alluded to there, I would say it’s gonna be a combination of all those things: sales velocity, mix, and then also how much does our product flow out of warehouse versus direct.

Jeff Strom, Incoming CEO, Boise Cascade1: I’m gonna add one thing to that. I think in BMD, we have added a tremendous amount of projects and growth over the last few years. Some of those we continue to operationalize, and some of those are not additive. As we move forward and as we get better, they continue every day to progress and get better, and that will add to it whether howling starts to move or not.

Kyle Beneduto, Analyst (stepping in for George Staphos), Bank of America Securities: Thank you, and good luck in the quarter.

Jeff Strom, Incoming CEO, Boise Cascade1: Thank you.

Rocco, Conference Facilitator: Thank you. Our next question comes from Ketan Mamtora with BMO Capital Markets. Please go ahead.

Ketan Mamtora, Analyst, BMO Capital Markets: Thank you. Let me also extend my congratulations, Nate, best wishes, in retirement, and Jeff, look forward to working with you.

Jeff Strom, Incoming CEO, Boise Cascade1: Thanks, Keith. Thank you.

Ketan Mamtora, Analyst, BMO Capital Markets: Maybe to start with, on the distribution side, can you talk about? You mentioned earlier about some restocking there. Can you talk to how your inventories are right now, both on the general line as well as on the commodity side, especially as we start to get ready for the spring season and recognizing that, you know, Q4 was quite weak?

Jeff Strom, Incoming CEO, Boise Cascade1: Yeah, Ketan, this is Jeff. On the inventories out there in general line, third, fourth quarter, we’re leaning out in the field. People ran those down. They absolutely relied on next-day service and exactly what they needed, didn’t buy anything extra at all. At the end of the year, there were some price increases that were announced, people bought into that ahead of the price increases a little bit, not as much as you would think. I’d say on general line inventories in the channel, they are still overall pretty lean for the most part, and people are relying on next-day distribution. As you would expect with us, we watch our inventories closely, and on ours, while we’re there to serve, and people knew we were, ours came down some in the fourth quarter like you expect.

With the early buys and the winter buys that are out there, we’re starting to see them build back up. We’re prepared and ready for whatever’s out there. We still think first half of the year is gonna be very heavy reliance on out-of-warehouse service.

Ketan Mamtora, Analyst, BMO Capital Markets: Got it. Okay, now, that’s helpful. Then, can you give us a quick update on how the doors in the Millwork business is doing and how that is holding up?

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: Yeah, this is Jo. You know, our door shops are actually doing really well, making big strides, all of them across the country. We’re currently even expanding our space in BROSCO. Our build-out should be ready to go in Florida, probably by mid-summer. We’re improving our capacity. We just improved some capacity in Boise. We continue to make strides in our door shops. I said earlier that we really are focused on the growth of our pre-finished business in door shops. You know, reduce lead times, automating where we can. We’re working on high-end custom doors so that our customers who are focused on volume production doors, that we can subsidize and assist them in their business. We continue to make strides in our door shops.

We continue to improve our operational efficiency as well as our revenue gains.

Ketan Mamtora, Analyst, BMO Capital Markets: Perfect. That’s very helpful. I jump back in the queue. Good luck.

Jeff Strom, Incoming CEO, Boise Cascade1: Thank you, Ketan.

Rocco, Conference Facilitator: Thank you. Our next question today comes from Jeffrey Stevenson at Loop Capital. Please go ahead.

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Hi, thanks for taking my questions today, and as others have said, Nate, congrats on your retirement.

Jeff Strom, Incoming CEO, Boise Cascade1: Thanks, Jeff.

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Yeah, no problem. Can you provide more color on the Holden Humphrey acquisition and the potential impact on your Northeast distribution business? Also, could there be more potential opportunities to expand existing relationships with key suppliers in the region, such as Trex or James Hardie, you know, with this acquisition?

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: Yeah, I’ll jump in there. Holden, which is now our Chicopee location, it has gone really well. It’s meeting our expectations. I’ll tell you that we’re just getting started. January was a tough winter month, we’re really kind of just getting rolling there, but we are already seeing efficiency gains with our people and our products, in conjunction with our Westfield location that’s over there. With the addition of Holden, we gained access to the one-step business in the market, which is a customer segment we really have not serviced in the Northeast region. We also gained access to many general line product categories that we’re excited about. These are new to us in that market as well.

Now we also have the opportunity with those product categories to leverage those relationships and those products across the entire Northeast region.

Jeffrey Stevenson, Analyst, Loop Capital: Great. No, that’s good to hear. you know, last year, you indicated that there was some slowdown in the M&A pipeline due to macro uncertainties before the Holden Humphrey transaction. I just wondered if there’s been any improvement in the M&A pipeline as we, you know, came to a close last year for both on strategic acquisitions, in key areas you’re focused on, and, you know, how you plan to balance, you know, M&A and share repurchases this year?

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Good morning, Jeff. This is Kelly. I would say the pipeline is, it’s still somewhat active, and we will continue to look to be opportunistic in terms of growing inorganically via M&A if we find the right thing to do. To your point, at the same time, we’ll also have a balanced approach to look to opportunistically buy share repurchases if the M&A activity is not there, and if we think the opportunity is right.

Jeffrey Stevenson, Analyst, Loop Capital: Great. Thank you.

Rocco, Conference Facilitator: Thank you. Our next question today comes from Reuben Garner with Benchmark. Please go ahead.

Reuben Garner, Analyst, Benchmark: Thank you. Good morning, everybody. Maybe to start, I know you guys are a little newer to giving the quarterly guidance. Curious what, on your end, kinda went better than expected to close the year, especially on the profitability front? Was that just conservatism, you know, a few months ago, because we were in such an uncertain environment, or were there things that you were able to kinda do internally that surprised you to the upside? How should we think about kind of the way you guys are giving guidance going forward? I guess in that, in that vein, what would lead to a similar sort of outperformance in the start of 2026?

Kelly Hibbs, Chief Financial Officer, Boise Cascade: Good morning, Reuben. This is Kelly. So I guess overarching in terms of guidance, look, we’re gonna try to put out what we think is reasonable guidance that we think we have a reasonable opportunity of being at, you know, the midpoint or a little bit above in terms of when we put out guide. I don’t wanna leave you with the impression that we sandbagged fourth quarter. We did not in terms of our guide. What we did see is we saw a little bit better activity than we thought in the back half of the year. BMD, in particular, I think, was a bit above their guide. You know, a good amount of activity and a good work in terms of cost control as we seasonally...

You know, as we moved into November and December, we saw some really good cost control. I don’t think there’s anything I would really specifically point out beyond that, Reuben. Jeff, anything you’d highlight?

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: No, the only thing I’d tell you is we, you know, we foreshadowed that it was gonna be warehouse-centric for the quarter, and it was, and it really was. Each month, it got more and more. December was the highest % of sales out of warehouse than we’ve had in a long time. People really leaned on that more so than ever before, and they knew that we had the material on the ground, and we did, and so we were there to serve, and that helped us.

Reuben Garner, Analyst, Benchmark: Yeah, so that was gonna be my next or part of my next question, Jeff, and also, for Jo here, as a follow-up to some comments you made earlier. So the warehousing or the elevated reliance on warehousing, I mean, does that tell you kind of a sense of cautiousness that your customer still has, even entering this kind of spring season for even some of the general line products? Then, you know, Jo, you mentioned all these, you know, the outperformance you guys have had, it has been very impressive in general line. What exactly are you guys doing that’s leading to outsized growth in, you know, some of your channels? You mentioned home centers. Like, what exactly are you guys doing that’s driving that outsized growth for you?

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: You know, as far as driving the growth, I think what I would tell you is, again, you know, I mentioned earlier that we have really focused on our general line mix, and what we’re doing with our general line product categories to grow there. You know, that’s been a strategic focus for us. As our mix shift switches, you know, and we’ve been able to grow that product category, we’ve seen our margins improve. We’ve done really well there. That said, I think it’s also important to note that we are not moving away from our volume in commodities. You know, in fact, I think our commodity performance also combats margin compression. You know, we are very good with the expertise of our people.

We continue to build out systems and methods that give us early indicators in the market on trends that allow us to move quickly on commodities, often ahead of the market. We continue to outperform there. Our door shops, again, the revenue growth that we’re seeing there is helping us perform better, and we’re gonna continue to grow there. To Jeff’s point, you know, from an organic growth perspective, we’ve made investments across the country that we continue to see grow and perform. You know, as we, as we improve from an operational standpoint, you know, we’re able to grow revenue. We bring our lead times in check, we’re able to grow our revenue there. We’re seeing market share gains across the country.

Then, yeah, with the home centers, we are putting a specific focus there on the home centers. We see a lot of opportunity, you know, great partners to us, and we are gonna continue to invest and put resources there so that we can continue to grow that opportunity. Reuben, I’m gonna add on to some of the things that you asked. Every project that we have done over the last two years has been about growing our general line products and adding to the mix and going wider and deeper with them, and that has paid off in a big way. You ask if the, if the customers out there, are they cautious? I would tell you they are. You know, what we heard at the Builder Show is, right, it’s gonna be very similar to last year, only in reverse.

Slower first half of the year, better second half of the year. There is some caution out there, without a doubt. We have lots more SKUs on the ground that we’ve added, new SKUs that come in, that we’ve been the supplier of, so we’ve absolutely had that. Lastly, I’ll tell you, the net working capital focus that is out there goes across every dealer that we touch, and it has been really intense. To get that net working capital down, they’re relying on us. Reuben, if we see volatility in the commodity market, that actually there’s opportunity and volatility for us in the commodity market.

You know, that volatility can create spreads, that improve margin, give us the opportunity to improve margin, and it’s actually a better environment than just bouncing along the bottom all year, which is a lot of what we saw in 2025.

Reuben Garner, Analyst, Benchmark: Great. Thanks, guys, congrats, Nate. Good luck in your retirement. Jeff, looking forward to continuing to work with you in an even bigger way. Thanks, guys.

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: Thanks, Ruben.

Rocco, Conference Facilitator: Thank you. That concludes our question and answer session. I’d like to turn the conference back over to Jeff Strom for any closing remarks.

Jo Barney, Leader of Building Materials Distribution Operations, Boise Cascade: Okay. Well, thank you very much for your interest in Boise Cascade. Please stay safe.

Rocco, Conference Facilitator: Thank you, sir. The conference has now concluded, and we thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.