Boise Cascade, L.L.C.

The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1-1. Good morning. My name is Tawanda, and I will be your conference facilitator today. At this time, I would like to welcome everyone to Boise Cascades' fourth quarter and four-year 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask the question during that time, simply press star 1-1 on your telephone keypad. Questions will be taken in the order they are received. If you would like to withdraw your question, please press star 1-1 again. It is now my pleasure to introduce you to Kelly Hibbs. Senior Vice President, CFO, and Treasurer of Boise Cascade. Mr. Hibbs, you may begin your conference.

Thank you, Tawanda, and good morning, everyone. I would like to welcome you to Boise Cascade's fourth quarter 2022 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO, Mike Brown, head of our wood products operations, and Jeff Strum, head of our building materials distribution operations. Turning to slide two. 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. Also, please note that the appendix includes reconciliations from our GAAP NET income to EBITDA and adjusted EBITDA and segment income to segment EBITDA. I will now turn the call over to Nate.

Thanks, Kelly. Good morning, everyone. Thank you for joining us on our earnings call today on slide number three. A few highlights as I reflect on a terrific 2022 for Boise Cascade. We reported full year net income of $857.7 million, or $21.56 per deleted share, on sales of $8.4 billion. We had strong performance and safety. We made great strides on our growth initiatives in both businesses, and we also rewarded our shareholders with $160 million of combined regular and special dividends. I also want to thank and recognize our nearly 7,000 associates across the company who made the results and accomplishments of 2022 possible. Let me now turn over to the fourth quarter results. New residential construction activity declined sharply, with total U.S. housing starts down 15%, driven by a decrease in single-family housing starts at 27% compared to the prior year quarter. Despite the challenging environment in the fourth quarter, we were able to deliver strong financial results. Our consolidated fourth quarter sales of $1.6 billion were down 9% from the fourth quarter of 2021. Our net income was $117.4 million, or $2.95 per share, compared to net income of $169.1 million, or $4.26 per share in the year-ago quarter. Wood Products reported segment EBITDA of $99.7 million in the fourth quarter, compared to $112.2 million in the year-ago quarter. Wood products was impacted by lower EWP sales volumes due to decline in housing starts and significant inventory stocking through the customer channel. We have and will continue to focus on managing our production levels to meet current and expected sales demand. Building materials distribution reported segment EBITDA of $99.4 million on sales of $1.4 billion for the fourth quarter compared to $144.2 million of segment EBITDA on sales of $1.6 billion in the comparative prior year quarter. BMD experienced lower sales volumes compared to the prior year quarter due to decline in housing starts and declining commodity prices also negatively impacted our financial results in the fourth quarter of 2022. However, our out-of-warehouse sales activity across a range of products was steady as our customers tend to desire mixed loads and look to manage inventory volume and risk during periods of market uncertainty. As we exit 2022, our balance sheet remains very strong and affords us the ability to further invest in our businesses through the business cycle. We look forward to the continued execution of our growth plans so that we remain well positioned when residential construction activity returns to normalized levels. I'll speak more to our growth initiatives during our outlook commentary. Kelly will now walk through our financial results in more detail and provide a further update on capital allocation, after which I'll come back to provide our outlook before we take your questions.