Boise Cascade's Q4 2024: Navigating Contradictions in Supply Chains, Pricing Pressures, and Inventory Strategies

These are the key contradictions discussed in Boise Cascade's latest 2024Q4 earnings call, specifically including: Canadian supply and tariff impacts, EWP pricing and demand, and inventory management strategies:



Financial Performance:
- Boise Cascade reported full year net income of $376.4 million or $9.57 per diluted share in 2024.
- The decline in consolidated fourth quarter sales to $1.6 billion was a 5% decrease from the fourth quarter of 2023, with net income at $68.9 million or $1.78 per share.
- The decrease in sales was primarily due to a 6% decline in total U.S. housing starts and 4% decline in single-family housing starts.

Segment Performance:
- Wood Products segment sales in the fourth quarter were $419.7 million, down 7% year-on-year, with segment EBITDA at $56.6 million.
- The BMD segment reported sales of $1.4 billion, down 4% from the previous year, but maintained segment EBITDA at $84.5 million.
- The decline in Wood Products sales was driven by reduced EWP and plywood sales prices, while BMD's stable EBITDA was supported by a 60 basis point increase in gross margin percentage.

EWP and LVL Trends:
- Fourth quarter LVL volumes increased by an impressive 11%, outperforming the 4% decline in single-family starts.
- LVL and I-joist pricing experienced sequential declines, with LVL pricing down 2% and I-joist pricing down 1%.
- The growth in LVL was supported by strong alignment between manufacturing and distribution capabilities, despite competitive market conditions.

Capital Expenditures and Shareholder Returns:
- Boise Cascade spent $230 million in capital expenditures in 2024, with plans to spend between $220 million and $240 million in 2025.
- The company returned $220 million to shareholders through dividends in 2024, with a $5 per share special dividend.
- The focus on capital expenditures is to support EWP growth strategies, while shareholder returns remain a priority.