• Full Year Net Income: $376.4 million or $9.57 per diluted share.
• Fourth Quarter Sales: $1.6 billion, down 5% from Q4 2023.
• Fourth Quarter Net Income: $68.9 million or $1.78 per share, compared to $97.5 million or $2.44 per share in Q4 2023.
• Wood Products Sales: $419.7 million in Q4, down 7% from Q4 2023.
• Wood Products Segment EBITDA: $56.6 million, down from $92.7 million in Q4 2023.
• BMD Sales: $1.4 billion in Q4, down 4% from Q4 2023.
• BMD Segment EBITDA: $84.5 million, up from $80.6 million in Q4 2023.
• BMD Gross Margin Percentage: 15.8%, up 60 basis points year-over-year.
• BMD EBITDA Margin: 5.9%, up from 5.4% in Q4 2023.
• Capital Expenditures 2024: $230 million.
• Dividends Paid 2024: $220 million, including $0.82 per share in regular dividends and a $5 per share special dividend.
• Share Repurchase: Approximately 1.75 million shares repurchased for $225 million.

• Warning! GuruFocus has detected 3 Warning Signs with BCC.

Release Date: February 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Boise Cascade Co (NYSE:BCC) reported a full year net income of $376.4 million, or $9.57 per diluted share, showcasing strong financial performance.
• The company successfully grew its distribution business through both organic and acquisition initiatives, highlighting strategic expansion efforts.
• Boise Cascade Co (NYSE:BCC) made significant capital investments to support its Engineered Wood Products (EWP) growth strategy, indicating a focus on future growth.
• The Building Materials Distribution (BMD) segment reported a 60-basis-point increase in gross margin percentage, demonstrating improved profitability despite a sales decline.
• The company paid $220 million in regular and special dividends in 2024, reflecting a commitment to returning capital to shareholders.

Negative Points

• Total US housing starts and single-family housing starts decreased by 6% and 4%, respectively, impacting Boise Cascade Co (NYSE:BCC)'s market environment.
• Consolidated fourth quarter sales were down 5% from the previous year, indicating a decline in revenue.
• Wood Products segment EBITDA decreased significantly due to lower EWP and plywood sales prices, affecting profitability.
• The Oakdale facility will be down for the entirety of the first quarter, negatively impacting plywood volumes and cost absorption.
• Weather-related disruptions led to unplanned downtime across several manufacturing and distribution locations, affecting operational efficiency.

Q & A Highlights

Q: Could you discuss the potential impact of tariffs on Canadian imports, particularly in relation to Boise Cascade's operations and opportunities? A: Nate Jorgensen, CEO, explained that while there are many unknowns regarding tariffs, Boise Cascade has modeled potential impacts and is prepared to respond. The company imports some commodities and web-stock from Canada, and while tariffs could increase costs, Boise Cascade plans to maintain its margin percentages. The broader concern is potential demand destruction due to affordability challenges if tariffs are implemented.

Q: How do you view the current pricing dynamics for Engineered Wood Products (EWP), and what are your expectations for 2025? A: Kelly Hibbs, CFO, noted that while there is no new capacity expected in the near term, competition for market share could lead to modest price erosion if demand remains flat. However, EWP remains a favorable option for builders due to its efficiency and simplicity at job sites.

Q: Can you provide insights into the operating environment and how builders are approaching the early selling season? A: Nate Jorgensen, CEO, highlighted that affordability remains a key concern for builders, with home prices and interest rates being central issues. Despite short-term hesitancy due to economic uncertainties, builders remain optimistic about medium to long-term housing fundamentals, believing the country is still underbuilt.

Q: What factors contributed to the strong growth in Laminated Veneer Lumber (LVL) volumes in the fourth quarter? A: Kelly Hibbs, CFO, attributed the 11% increase in LVL volumes to effective sales efforts and the strong alignment between Boise Cascade's manufacturing and distribution teams. The complexity of home designs continues to support demand for beams and headers, which are key applications for LVL.

Q: How is Boise Cascade approaching capital allocation, particularly regarding shareholder returns and potential M&A activities? A: Kelly Hibbs, CFO, stated that the company is focused on executing its capital spending objectives and remains open to M&A opportunities that align with its strategy. Boise Cascade plans to continue opportunistic share buybacks and may consider a special dividend later in the year, depending on M&A developments and organic growth opportunities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.