Latest news with #BoiseCascade
Yahoo
06-08-2025
- Business
- Yahoo
Boise Cascade Co (BCC) Q2 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...
Consolidated Sales: $1.7 billion, down 3% from Q2 2024. Net Income: $62 million or $1.64 per share, compared to $112.3 million or $2.84 per share in Q2 2024. Wood Product Sales: $447.2 million, down 9% from Q2 2024. Wood Products Segment EBITDA: $37.3 million, compared to $95.1 million in Q2 2024. BMD Sales: $1.6 billion, down 2% from Q2 2024. BMD Segment EBITDA: $91.8 million, compared to $97.1 million in Q2 2024. BMD Gross Margin: 15.4%, a 60-basis-point improvement year-over-year. Capital Expenditures: $132 million in the first half of 2025. Share Repurchase: Approximately $96 million repurchased in the first seven months of 2025. Quarterly Dividend: $0.22 per share, a 5% increase. Warning! GuruFocus has detected 3 Warning Signs with BCC. Release Date: August 05, 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 sequential volume growth driven by seasonally stronger activity. The modernization project at the Oakdale mill is substantially complete, enhancing operational efficiency and reliability. BMD's gross margin improved by 60 basis points year-over-year, reflecting strong execution and focus on general line products. The company completed two lease buyouts of successful distribution centers in Chicago and Minneapolis, expanding its market presence. Boise Cascade Co (NYSE:BCC) has a strong balance sheet and resilient free cash flow, allowing for balanced capital deployment and shareholder returns. Negative Points Total US housing starts and single-family housing starts decreased, impacting overall demand. Consolidated second-quarter sales were down 3% from the previous year, with net income also declining. Wood Products segment EBITDA decreased significantly due to lower sales prices and volumes, as well as unfavorable inventory adjustments. Scheduled outages and maintenance projects negatively impacted year-over-year EBITDA comparisons. The company anticipates continued headwinds for residential construction activity, affecting future performance. Q & A Highlights Q: Can you discuss the performance gap between LVL and I-joists and what drives this difference? A: Nate Jorgensen, CEO, explained that LVL has better resiliency due to its diverse applications like beams, headers, and wall framing, which continue to grow. I-joists are mainly used in floor systems, limiting their opportunities due to competition from floor trusses and slab-on-grade construction. The company feels confident about its market position in both LVL and I-joists, despite these differences. Q: How should we think about the EWP destocking in Q3, and could it extend into Q4? A: Nate Jorgensen, CEO, noted that the purchase profile is changing, with less mill direct activity and more reliance on distribution for units and job packs. This shift is expected to continue through 2025 and into early 2026, with consumption remaining strong from distribution channels. Q: What are the current operating rates across the business, and how do you see EWP pricing evolving? A: Troy Little, EVP of Wood Products, stated that operating rates were in the low 80s for EWP during Q2, with plywood finishing around 70%. With Oakdale back online, they expect operating rates to adjust based on demand, potentially in the 65-70% range. EWP pricing has been trending downward, and the company is monitoring competitive pressures. Q: Can you provide an update on the strike at the Billings facility and its potential impact? A: Joanna Barney, SVP of BMD Western Operations, reported that 19 union employees at the Billings, Montana facility initiated a strike on July 29. The strike is limited to this location, and business continuity protocols are in place to avoid customer disruptions. The impact is expected to be minimal. Q: How is the general line part of the business performing, and what are the expectations for the coming quarters? A: Joanna Barney, SVP of BMD Western Operations, mentioned that the general line category has held up well, with strong inventory positioning. Customers have leaned on Boise Cascade's inventories due to market uncertainty, and the company expects this trend to continue, maintaining strong performance in the general line category. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
05-08-2025
- Business
- Yahoo
Boise Cascade (BCC) Q2 Earnings and Revenues Miss Estimates
Boise Cascade (BCC) came out with quarterly earnings of $1.64 per share, missing the Zacks Consensus Estimate of $1.69 per share. This compares to earnings of $2.84 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -2.96%. A quarter ago, it was expected that this engineered wood products and plywood company would post earnings of $1.36 per share when it actually produced earnings of $1.06, delivering a surprise of -22.06%. Over the last four quarters, the company has not been able to surpass consensus EPS estimates. Boise Cascade, which belongs to the Zacks Building Products - Wood industry, posted revenues of $1.74 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.17%. This compares to year-ago revenues of $1.8 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Boise Cascade shares have lost about 29.9% since the beginning of the year versus the S&P 500's gain of 6.1%. What's Next for Boise Cascade? While Boise Cascade has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Boise Cascade was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.86 on $1.7 billion in revenues for the coming quarter and $5.91 on $6.53 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Wood is currently in the bottom 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, JELD-WEN (JELD), has yet to report results for the quarter ended June 2025. The results are expected to be released on August 5. This company is expected to post quarterly loss of $0.11 per share in its upcoming report, which represents a year-over-year change of -132.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. JELD-WEN's revenues are expected to be $812.87 million, down 17.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report JELD-WEN Holding, Inc. (JELD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
04-08-2025
- Business
- Yahoo
Boise Cascade (NYSE:BCC) Misses Q2 Revenue Estimates
Building products company Boise Cascade Company (NYSE:BCC) fell short of the market's revenue expectations in Q2 CY2025, with sales falling 3.2% year on year to $1.74 billion. Its GAAP profit of $1.64 per share was 3.1% below analysts' consensus estimates. Is now the time to buy Boise Cascade? Find out in our full research report. Boise Cascade (BCC) Q2 CY2025 Highlights: Revenue: $1.74 billion vs analyst estimates of $1.75 billion (3.2% year-on-year decline, 0.7% miss) EPS (GAAP): $1.64 vs analyst expectations of $1.69 (3.1% miss) Adjusted EBITDA: $119 million vs analyst estimates of $126.9 million (6.8% margin, 6.2% miss) Operating Margin: 4.6%, down from 8.2% in the same quarter last year Free Cash Flow was -$45.88 million, down from $101.9 million in the same quarter last year Market Capitalization: $3.14 billion 'During the second quarter of 2025, we experienced sequential volume growth driven by seasonally stronger activity, although underlying demand for new residential construction remained muted,' said Nate Jorgensen, CEO. Company Overview Formed through the merger of two lumber companies, Boise Cascade Company (NYSE:BCC) manufactures and distributes wood products and other building materials. Revenue Growth A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Boise Cascade's sales grew at a mediocre 6.5% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a rough starting point for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Boise Cascade's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.2% annually. We can better understand the company's revenue dynamics by analyzing its most important segments, Building Material Distribution and Wood products, which are 92.8% and 25.7% of revenue. Over the last two years, Boise Cascade's Building Material Distribution revenue (plywood, siding, insulation) averaged 2.5% year-on-year declines while its Wood products revenue (lumber and beams) averaged 5.9% declines. This quarter, Boise Cascade missed Wall Street's estimates and reported a rather uninspiring 3.2% year-on-year revenue decline, generating $1.74 billion of revenue. Looking ahead, sell-side analysts expect revenue to grow 2.5% over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below the sector average. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Operating Margin Boise Cascade has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it's a show of well-managed operations if they're high when gross margins are low. Looking at the trend in its profitability, Boise Cascade's operating margin decreased by 6.7 percentage points over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. In Q2, Boise Cascade generated an operating margin profit margin of 4.6%, down 3.5 percentage points year on year. Since Boise Cascade's operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased. Earnings Per Share Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Boise Cascade's EPS grew at an astounding 25.1% compounded annual growth rate over the last five years, higher than its 6.5% annualized revenue growth. However, this alone doesn't tell us much about its business quality because its operating margin didn't improve. Diving into Boise Cascade's quality of earnings can give us a better understanding of its performance. A five-year view shows that Boise Cascade has repurchased its stock, shrinking its share count by 4%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Boise Cascade, its two-year annual EPS declines of 31.7% mark a reversal from its (seemingly) healthy five-year trend. We hope Boise Cascade can return to earnings growth in the future. In Q2, Boise Cascade reported EPS at $1.64, down from $2.84 in the same quarter last year. This print missed analysts' estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Boise Cascade's full-year EPS of $6.81 to shrink by 2.3%. Key Takeaways from Boise Cascade's Q2 Results It was good to see Boise Cascade beat analysts' Wood products revenue expectations this quarter. On the other hand, its EBITDA missed and its EPS fell short of Wall Street's estimates. Overall, this was a softer quarter. The stock traded down 1.4% to $81.41 immediately after reporting. Boise Cascade's earnings report left more to be desired. Let's look forward to see if this quarter has created an opportunity to buy the stock. When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
04-08-2025
- Business
- Business Wire
Boise Cascade Company Reports Second Quarter 2025 Results
BOISE, Idaho--(BUSINESS WIRE)--Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported net income of $62.0 million, or $1.64 per share, on sales of $1.7 billion for the second quarter ended June 30, 2025, compared with net income of $112.3 million, or $2.84 per share, on sales of $1.8 billion for the second quarter ended June 30, 2024. 'During the second quarter of 2025, we experienced sequential volume growth driven by seasonally stronger activity, although underlying demand for new residential construction remained muted,' said Nate Jorgensen, CEO. 'While we incurred expected costs related to the Oakdale plywood mill outage, the completion of this modernization project marks a significant milestone, enhancing operational efficiency, strengthening reliability, and reinforcing the value of self-sufficient veneer production as a key competitive advantage. As we navigate a dynamic market environment, our actions will address near-term challenges while continuing to invest in opportunities that position Boise Cascade for sustainable growth in the years ahead.' Second Quarter 2025 Highlights 2Q 2025 2Q 2024 % change (in thousands, except per-share data and percentages) Consolidated Results Sales $ 1,740,114 $ 1,797,670 (3 )% Net income 61,985 112,292 (45 )% Net income per common share - diluted 1.64 2.84 (42 )% Adjusted EBITDA 1 119,000 181,207 (34 )% Segment Results Wood Products sales $ 447,235 $ 489,823 (9 )% Wood Products income 13,976 72,780 (81 )% Wood Products EBITDA 1 37,292 95,050 (61 )% Building Materials Distribution sales 1,614,915 1,655,221 (2 )% Building Materials Distribution income 78,033 85,400 (9 )% Building Materials Distribution EBITDA 1 91,848 97,141 (5 )% Expand 1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release. Expand In second quarter 2025, total U.S. housing starts and single-family housing starts decreased 1% and 8%, respectively, compared to the same period in 2024. On a year-to-date basis through June 2025, total housing starts and single-family housing starts decreased 1% and 7%, respectively, compared to the same period in 2024. Single-family housing starts are the key demand driver for our sales. Wood Products Wood Products' sales, including sales to Building Materials Distribution (BMD), decreased $42.6 million, or 9%, to $447.2 million for the three months ended June 30, 2025, from $489.8 million for the three months ended June 30, 2024. The decrease in sales was driven by lower sales prices for LVL and I-joists (collectively referred to as EWP). Lower plywood sales volumes and sales prices also contributed to the decrease in sales. In addition, lower sales volumes for I-joists resulted in decreased sales. These decreases were offset partially by increased sales volumes for LVL. Wood Products' segment income decreased $58.8 million to $14.0 million for the three months ended June 30, 2025, from $72.8 million for the three months ended June 30, 2024. The decrease in segment income was due to lower EWP and plywood sales prices, as well as higher per-unit conversion costs primarily as a result of downtime to complete the modernization projects at our Oakdale, Louisiana veneer and plywood mill. In addition, lower plywood sales volumes and an unfavorable profit in inventory adjustment contributed to the decrease in segment income. These decreases in segment income were offset partially by a $3.9 million gain on the sale of a non-operating property. Comparative average net selling prices and sales volume changes for EWP and plywood are as follows: Building Materials Distribution BMD's sales decreased $40.3 million, or 2%, to $1,614.9 million for the three months ended June 30, 2025, from $1,655.2 million for the three months ended June 30, 2024. Compared with the same quarter in the prior year, the decrease in sales was driven by a sales price decrease of 2%, as sales volumes were flat. By product line, commodity sales decreased 5%, general line product sales increased 4%, and EWP sales (substantially all of which are sourced through our Wood Products segment) decreased 12%. BMD segment income decreased $7.4 million to $78.0 million for the three months ended June 30, 2025, from $85.4 million for the three months ended June 30, 2024. The decrease in segment income was driven by increased selling and distribution expenses and depreciation and amortization expense of $12.1 million and $2.1 million, respectively. These decreases to segment income were offset partially by a gross margin increase of $3.4 million, resulting primarily from increased margins on general line products, which were offset partially by decreased margins on commodity and EWP products. Additionally, segment income benefited from a $3.8 million gain on the sale of a non-operating property. Balance Sheet and Liquidity Boise Cascade ended second quarter 2025 with $481.0 million of cash and cash equivalents and $395.2 million of undrawn committed bank line availability, for total available liquidity of $876.2 million. The Company had $450.0 million of outstanding debt at June 30, 2025. Capital Allocation We expect capital expenditures in 2025, excluding potential acquisition spending, to total approximately $220 million to $240 million. This level of capital expenditures could increase or decrease as a result of several factors, including acquisitions, efforts to further accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, availability of engineering and construction resources, and timing and availability of equipment purchases. For the six months ended June 30, 2025, the Company paid $18.4 million in common stock dividends. On July 31, 2025, our board of directors declared a quarterly dividend of $0.22 per share on our common stock, payable on September 17, 2025, to stockholders of record on September 2, 2025. For the six months ended June 30, 2025, the Company paid $86.0 million for the repurchase of 837,352 shares of our common stock. In July 2025, the Company repurchased an additional 117,000 shares of our common stock at a cost of approximately $10 million. Subsequent to these share repurchases, there were approximately 850,000 shares available for repurchase under our existing share repurchase program. Outlook Demand for the products we manufacture, as well as the products we purchase and distribute, is closely tied to new residential construction, residential repair-and-remodeling activity, and light commercial construction. Residential construction, particularly new single-family construction, remains a key driver of demand for the products we manufacture and distribute. During the past quarter, the operating environment reflected adjustments by large public homebuilders, who moderated their building pace to align with a demand environment shaped by affordability considerations, cautious consumer sentiment, and broader economic conditions. Evolving market conditions have led to reduced home turnover and households delaying big projects impacting repair-and-remodeling spending. Near-term end market demand has eased and will continue to be influenced by factors such as mortgage rates, home affordability, home equity levels, home sizes, new and existing home inventory levels, unemployment rates, and consumer confidence. However, long-term demand drivers for residential construction, including an undersupply of housing units, aging U.S. housing stock, and elevated levels of homeowner equity, remain strong and continue to support the industry's fundamentals. As a manufacturer of plywood, a commodity product, we remain subject to fluctuations in product pricing and input costs. Our distribution business, which purchases and resells a diverse range of products, experiences opportunities for increased sales and margins during periods of rising prices, while periods of declining prices may present challenges. Future product pricing, particularly for commodity products, is expected to remain dynamic, influenced by economic conditions, industry operating rates, supply disruptions, duties, tariffs, transportation constraints, inventory levels, and seasonal demand patterns. For the balance of 2025, our rates of production and inventory stocking positions, will be influenced by end market demand signals and channel inventory decisions of our customer base. About Boise Cascade Boise Cascade Company is one of the largest producers of engineered wood products and plywood in North America and a leading U.S. wholesale distributor of building products. For more information, please visit the Company's website at Webcast and Conference Call Boise Cascade will host a webcast and conference call to discuss second quarter earnings on Tuesday, August 5, 2025, at 11 a.m. Eastern. To join the webcast, go to the Investors section of our website at and select the Event Calendar link. Analysts and investors who wish to ask questions during the Q&A session can register for the call here. The archived webcast will be available in the Investors section of Boise Cascade's website. Use of Non-GAAP Financial Measures We refer to the terms EBITDA, Adjusted EBITDA and Segment EBITDA in this earnings release and the accompanying Quarterly Statistical Information as supplemental measures of our performance and liquidity that are not required by or presented in accordance with generally accepted accounting principles in the United States (GAAP). We define EBITDA as income before interest (interest expense and interest income), income taxes, and depreciation and amortization. Additionally, we disclose Adjusted EBITDA, which further adjusts EBITDA to exclude the change in fair value of interest rate swaps. We also disclose Segment EBITDA, which is segment income before depreciation and amortization. We believe EBITDA, Adjusted EBITDA and Segment EBITDA are meaningful measures because they present a transparent view of our recurring operating performance and allow management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. We also believe EBITDA, Adjusted EBITDA and Segment EBITDA are useful to investors because they provide a means to evaluate the operating performance of our segments and our Company on an ongoing basis using criteria that are used by our management and because they are frequently used by investors and other interested parties when comparing companies in our industry that have different financing and capital structures and/or tax rates. EBITDA, Adjusted EBITDA and Segment EBITDA, however, are not measures of our liquidity or financial performance under GAAP and should not be considered as alternatives to net income, income from operations, or any other performance measure derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. The use of EBITDA, Adjusted EBITDA and Segment EBITDA instead of net income or segment income have limitations as analytical tools, including: the inability to determine profitability; the exclusion of interest expense, interest income, and associated significant cash requirements; and the exclusion of depreciation and amortization, which represent unavoidable operating costs. Management compensates for these limitations by relying on our GAAP results. Our measures of EBITDA, Adjusted EBITDA and Segment EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. For a reconciliation of net income to EBITDA and Adjusted EBITDA and segment income to Segment EBITDA, please see the section titled, "Summary Notes to Consolidated Financial Statements and Segment Information" below. Forward-Looking Statements This press release contains statements concerning future events and expectations, including, without limitation, statements relating to our outlook. These statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, or future events or performance, often, but not always, through the use of words or phrases such as "anticipates," "believes," "could," "estimates," "expects," "intends," 'outlook,' "potential," "plans," "predicts," "preliminary," "projects," "targets," "may," "may result," or similar expressions, are not statements of historical facts and may be forward-looking. Forward-looking statements are not guarantees of future performance, involve estimates, assumptions, risks, and uncertainties, and may differ materially from actual results, performance, or outcomes. Factors that could cause actual results or outcomes to differ materially from those contained in forward-looking statements include those factors set forth in Boise Cascade's most recent Annual Report on Form 10-K, subsequent reports filed by Boise Cascade with the Securities and Exchange Commission (SEC), and the following important factors: the commodity nature of a portion of our products and their price movements, which are driven largely by general economic conditions, industry capacity and operating rates, industry cycles that affect supply and demand, and net import and export activity; the highly competitive nature of our industry; declines in demand for our products due to competing technologies or materials, as well as changes in building code provisions; disruptions to information systems used to process and store customer, employee, and vendor information, as well as the technology that manages our operations and other business processes; material disruptions and/or major equipment failure at our manufacturing facilities; declining demand for residual byproducts, particularly wood chips generated in our manufacturing operations; labor disruptions, shortages of skilled and technical labor, or increased labor costs; the need to successfully formulate and implement succession plans for key members of our management team; product shortages, loss of key suppliers, and our dependence on third-party suppliers and manufacturers; the cost and availability of third-party transportation services used to deliver the goods we manufacture and distribute, as well as our raw materials; cost and availability of raw materials, including wood fiber and glues and resins; our ability to execute our organic growth and acquisition strategies efficiently and effectively; failures or delays with new or existing technology systems and software platforms; our ability to successfully pursue our long-term growth strategy related to innovation and digital technology; concentration of our sales among a relatively small group of customers, as well as the financial condition and creditworthiness of our customers; impairment of our long-lived assets, goodwill, and/or intangible assets; substantial ongoing capital investment costs, including those associated with organic growth and acquisitions, and the difficulty in offsetting fixed costs related to those investments; our indebtedness, including the possibility that we may not generate sufficient cash flows from operations or that future borrowings may not be available in amounts sufficient to fulfill our debt obligations and fund other liquidity needs; restrictive covenants contained in our debt agreements; changes in foreign trade policy, including the imposition of tariffs; compliance with data privacy and security laws and regulations; the impacts of climate change and related legislative and regulatory responses intended to reduce climate change; cost of compliance with government regulations, in particular, environmental regulations; exposure to product liability, product warranty, casualty, construction defect, and other claims; and fluctuations in the market for our equity. It is not possible to predict or identify all risks and uncertainties that might affect the accuracy of our forward-looking statements and, consequently, our descriptions of such risks and uncertainties should not be considered exhaustive. There is no guarantee that any of the events anticipated by these forward-looking statements will occur, and if any of the events do occur, there is no guarantee what effect they will have on the company's business, results of operations, cash flows, financial condition and future prospects. Forward-looking statements speak only as of the date they are made, and, except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Wood Products Segment Statements of Operations (in thousands, except percentages) (unaudited) Three Months Ended Six Months Ended June 30 March 31, 2025 June 30 2025 2024 2025 2024 Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 398,451 378,920 362,246 760,697 736,641 Depreciation and amortization 23,316 22,270 22,486 45,802 46,654 Selling and distribution expenses 11,004 11,114 10,603 21,607 21,665 General and administrative expenses 3,816 4,606 3,313 7,129 9,626 Other (income) expense, net (3,328 ) 133 (512 ) (3,840 ) 147 433,259 417,043 398,136 831,395 814,733 Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 89.1 % 77.4 % 87.1 % 88.1 % 76.8 % Depreciation and amortization 5.2 % 4.5 % 5.4 % 5.3 % 4.9 % Selling and distribution expenses 2.5 % 2.3 % 2.5 % 2.5 % 2.3 % General and administrative expenses 0.9 % 0.9 % 0.8 % 0.8 % 1.0 % Other (income) expense, net (0.7 %) — % (0.1 )% (0.4 %) — % 96.9 % 85.1 % 95.7 % 96.3 % 85.0 % Segment income 3.1 % 14.9 % 4.3 % 3.7 % 15.0 % Expand Building Materials Distribution Segment Statements of Operations (in thousands, except percentages) (unaudited) Three Months Ended Six Months Ended June 30 March 31, 2025 June 30 2025 2024 2025 2024 Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 1,365,755 1,409,510 1,200,940 2,566,695 2,687,931 Depreciation and amortization 13,815 11,741 14,362 28,177 22,848 Selling and distribution expenses 150,865 138,716 133,099 283,964 272,330 General and administrative expenses 10,689 10,070 9,765 20,454 19,604 Other (income) expense, net (4,242 ) (216 ) 533 (3,709 ) (334 ) 1,536,882 1,569,821 1,358,699 2,895,581 3,002,379 (percentage of sales) Segment sales 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 84.6 % 85.2 % 85.3 % 84.9 % 85.1 % Depreciation and amortization 0.9 % 0.7 % 1.0 % 0.9 % 0.7 % Selling and distribution expenses 9.3 % 8.4 % 9.5 % 9.4 % 8.6 % General and administrative expenses 0.7 % 0.6 % 0.7 % 0.7 % 0.6 % Other (income) expense, net (0.3 )% — % — % (0.1 )% — % 95.2 % 94.8 % 96.6 % 95.8 % 95.0 % Segment income 4.8 % 5.2 % 3.4 % 4.2 % 5.0 % Expand Segment Information (in thousands) (unaudited) Three Months Ended Six Months Ended June 30 March 31, 2025 June 30 2025 2024 2025 2024 Segment sales Wood Products $ 447,235 $ 489,823 $ 415,845 $ 863,080 $ 958,751 Building Materials Distribution 1,614,915 1,655,221 1,407,116 3,022,031 3,160,242 Intersegment eliminations (322,036 ) (347,374 ) (286,467 ) (608,503 ) (675,903 ) Total net sales $ 1,740,114 $ 1,797,670 $ 1,536,494 $ 3,276,608 $ 3,443,090 Segment income Wood Products $ 13,976 $ 72,780 $ 17,709 $ 31,685 $ 144,018 Building Materials Distribution 78,033 85,400 48,417 126,450 157,863 Total segment income 92,009 158,180 66,126 158,135 301,881 Unallocated corporate costs (11,479 ) (11,199 ) (11,607 ) (23,086 ) (21,918 ) Segment EBITDA Wood Products $ 37,292 $ 95,050 $ 40,195 $ 77,487 $ 190,672 Building Materials Distribution 91,848 97,141 62,779 154,627 180,711 Expand See accompanying summary notes to consolidated financial statements and segment information. Boise Cascade Company Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended June 30 2025 2024 Cash provided by (used for) operations Net income $ 102,333 $ 216,416 Items in net income not using (providing) cash Depreciation and amortization, including deferred financing costs and other 76,341 71,832 Stock-based compensation 7,010 7,923 Pension expense 65 74 Deferred income taxes 2,778 11,088 Change in fair value of interest rate swaps 925 707 Other (11,181 ) 115 Decrease (increase) in working capital, net of acquisitions Receivables (133,103 ) (102,096 ) Inventories (115,661 ) (120,976 ) Prepaid expenses and other (7,750 ) (7,870 ) Accounts payable and accrued liabilities 86,242 99,354 Income taxes payable (2,677 ) (6,251 ) Other (628 ) (1,151 ) Net cash provided by operations 4,694 169,165 Cash provided by (used for) investment Expenditures for property and equipment (132,257 ) (74,099 ) Acquisitions of businesses and facilities, net of cash acquired — (3,387 ) Proceeds from sales of assets and other 10,152 819 Net cash used for investment (122,105 ) (76,667 ) Cash provided by (used for) financing Borrowings of long-term debt, including revolving credit facility 50,000 — Payments of long-term debt, including revolving credit facility (50,000 ) — Treasury stock purchased (87,746 ) (88,858 ) Dividends paid on common stock (18,383 ) (19,069 ) Tax withholding payments on stock-based awards (5,939 ) (11,117 ) Payments of deferring financing costs (1,819 ) — Other (943 ) (952 ) Net cash used for financing (114,830 ) (119,996 ) Net decrease in cash and cash equivalents (232,241 ) (27,498 ) Balance at beginning of the period 713,260 949,574 Balance at end of the period $ 481,019 $ 922,076 Expand Summary Notes to Consolidated Financial Statements and Segment Information The Consolidated Statements of Operations, Segment Statements of Operations, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information presented herein do not include the notes accompanying the Company's Consolidated Financial Statements and should be read in conjunction with the Company's 2024 Form 10-K and the Company's other filings with the Securities and Exchange Commission. Net income for all periods presented involved estimates and accruals. EBITDA represents income before interest (interest expense and interest income), income taxes, and depreciation and amortization. Additionally, we disclose Adjusted EBITDA, which further adjusts EBITDA to exclude the change in fair value of interest rate swaps. The following table reconciles net income to EBITDA and Adjusted EBITDA for the (i) three months ended June 30, 2025 and 2024, (ii) three months ended March 31, 2025, and (iii) six months ended June 30, 2025 and 2024: The following table reconciles segment income and unallocated corporate costs to Segment EBITDA, EBITDA and Adjusted EBITDA for the (i) three months ended June 30, 2025 and 2024, (ii) three months ended March 31, 2025, and (iii) six months ended June 30, 2025 and 2024: Three Months Ended Six Months Ended June 30 March 31, 2025 June 30 2025 2024 2025 2024 (in thousands) Wood Products Segment income $ 13,976 $ 72,780 $ 17,709 $ 31,685 $ 144,018 Depreciation and amortization 23,316 22,270 22,486 45,802 46,654 Segment EBITDA $ 37,292 $ 95,050 $ 40,195 $ 77,487 $ 190,672 Building Materials Distribution Segment income $ 78,033 $ 85,400 $ 48,417 $ 126,450 $ 157,863 Depreciation and amortization 13,815 11,741 14,362 28,177 22,848 Segment EBITDA $ 91,848 $ 97,141 $ 62,779 $ 154,627 $ 180,711 Corporate Unallocated corporate costs $ (11,479 ) $ (11,199 ) $ (11,607 ) $ (23,086 ) $ (21,918 ) Foreign currency exchange gain (loss) 1,093 (104 ) — 1,093 (403 ) Pension expense (excluding service costs) (32 ) (37 ) (33 ) (65 ) (74 ) Change in fair value of interest rate swaps (435 ) (487 ) (490 ) (925 ) (707 ) Depreciation and amortization 278 356 273 551 715 EBITDA (10,575 ) (11,471 ) (11,857 ) (22,432 ) (22,387 ) Change in fair value of interest rate swaps 435 487 490 925 707 Expand
Forbes
04-08-2025
- Business
- Forbes
Here's A 12-Stock 'Sane Portfolio' For Crazy Times
In today's higher-tariff world, where political and geopolitical clashes are harsh, you might want to take your stock portfolio's risk level down a notch. Perhaps the Sane Portfolio can be of some help. This is a theoretical portfolio, intended to be slightly on the low-risk side of the risk spectrum. It contains a dozen stocks, and I refresh the list once a year. To get in, a stock must meet seven criteria, described below. Once I choose a stock, it stays in unless it flunks one of the seven criteria. Over 23 years, the Sane Portfolio has averaged an 11.2% annual return. That slightly beats the Standard & Poor's 500 Total Return Index, with an average return of 10.8%. My column results are hypothetical and shouldn't be confused with results I obtain for clients. Past performance doesn't predict the future. My list from a year ago trailed far behind the S&P. It posted a 6.9% return while the index returned 21.9%. My worst performer was Boise Cascade Co. (BCC), down 30%. My best was Monarch Casino & Resort Inc. (MCRI), up 45%. To be eligible for the Sane Portfolio, a stock must satisfy seven criteria. No single criterion is especially hard, but few companies can check all seven boxes. This year, seven Sane Portfolio companies stay on from previous years. D.R. Horton Inc. (DHI), the nation's largest homebuilder, is back for a sixth consecutive year. Many buyers can't afford a home at today's mortgage rates. So, Horton's latest year was soggy, but it has grown revenue at a 17% clip for the past decade. Back for a fifth year is Paccar Inc., which builds heavy trucks (Kenworth and Peterbilt). The latest year has been rough. Companies have been reluctant to spend on trucks, amid tariff uncertainty. But Paccar it has achieved 11% annual earnings growth in the past decade. Boise Cascade Co. (BCC) of Boise, Idaho, which makes engineered-wood products and plywood, hangs in there for a fourth year. As noted above, this stock was a dog in the past twelve months. However, the stock looks cheap to me at about 10 times earnings. After a gain of around 30% in the past 12 months, W.R. Berkley Corp. (WRB) returns for a third engagement. It's a commercial casualty insurance company based in Greenwich, Connecticut. Three companies are in the Sane Portfolio as sophomores. One is EOG Resources Inc. (EOG), a big Houston-based oil and gas producer that emerged from the remnants of the Enron empire. Its profitability is impressive, with a 21% return on stockholders' equity. Another sophomore is Academy Sports & Outdoors Inc. (ASO), a chain of sporting goods stores headquartered in Katy, Texas. I'm concerned that it gets a lot of its merchandise from China, so it may be hard-hit by tariffs. If it can stay on this roster another year, I'll be impressed. Returning, too, is Photronics Inc. (PLAB), which makes photomasks using in manufacturing semiconductor chips. Profits vary from year to year, but the company, based in Brookfield, Connecticut, has shown positive earnings ten years in a row. Five companies dropped out of the Sane Portfolio, giving me five slots to fill. I'll start with Axcelis Technologies Inc. (ACLS), based in Beverly, Massachusetts. Like Photronics, it makes equipment for manufacturing semiconductor chips. Its specialty is ion implantation. Block Inc. (XYZ) operates the Square payments system. Small businesses like its hardware and software, and it's been growing nicely. Profits have shot up at a 30% annual rate the past five years. Cactus Inc. (WHD), which makes oil-drilling equipment, is based in (where else?) Houston, Texas. I particularly like its balance sheet, with debt only 4 percent of stockholders' equity. Cigna Group (CI), one of the largest U.S. health insurers, has been a stodgy stock. But I think it would hold up well if the market turns rocky. Analysts expect earnings to rise. Crocs Inc. (CROX) makes casual shoes with holes for ventilation or decoration. It was a fad stock several years ago, rising 104% from mid-2006 to the end of 2007. Now it seems attractively cheap to me at six times earnings. Disclosure: I own D.R. Horton for one client.
