Boise Cascade, L.L.C.

At this time, I would like to welcome everyone to Boise Cascade's first quarter 2025 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. It is now my pleasure to introduce you to Chris Forey, Vice President, Finance and Investor Relations, Boise Cascade. Mr. Forey, you may begin your conference.

Thank you, Rivka, and good morning, everyone. I'd like to welcome you to Boise Cascades first quarter 2025 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO, Jeff Strum, our COO, Kelly Hibbs, our CFO, Troy Little, head of our wood products operations, and Joe Barney, 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 of the SEC regarding the risks associated with these forward-looking statements. Also, please note that the appendix includes reconciliations from our gap net income to EBITDA and adjusted EBITDA and segment income to segment EBITDA. I will now turn the call over to Nate.

Thanks, Chris. Good morning, everyone. Thank you for joining us for earnings call today. I'm on slide number three. Total U.S. housing starts and single-family housing starts decreased 2% and 6%, respectively, compared to the prior year quarter. Our consolidated first quarter sales of $1.5 billion were down 7% from first quarter of 2024. Our net income was $40.3 million, or $1.06 per share, compared to net income of $104.1 million, or $2.61 per share in the year-ago quarter. Our team delivered solid results during the quarter when considering an environment influenced by constrained demand, uncertain trade policies, and difficult weather. Homebuyer affordability challenges continue to affect demand, and we were compounded by increasing economic uncertainty that has led us to lower consumer and builder confidence. Despite the backdrop, our associates across the company remain clearly focused on delivering value to our customer and vendor partners, for which I'm incredibly grateful. In addition, the planned outage at our Oakdale, Louisiana plywood and veneer facility bill negatively impacted our first quarter results. The significant modernization products underway there are on schedule to be completed at the end of the second quarter and will contribute to the ongoing strength of our EWP franchise. Lastly, our clear focus on strategic investments and returns of capital to our shareholders is bolstered by the strength of our balance sheet and our constructive view on long-term demand drivers for residential construction. Kelly will now walk through our financial segment results and provide an update on our capital allocation priorities, after which I'll provide an outlook before we take your questions. Kelly?

Thank you, Nate, and good morning, everyone. Wood product sales in the first quarter, including sales to our distribution segment, were $415.8 million, down 11% compared to first quarter 2024. Wood product segment EBITDA was $40.2 million compared to EBITDA of $95.6 million reported in the year-ago quarter. The decrease in segment EBITDA was due primarily to lower EWP and plywood sales prices and lower EWP volumes. In addition, the scheduled Oakdale outage negatively impacted year-over-year and sequential EBITDA comparisons by approximately 8 million and 7 million, respectively. In BMD, our sales in the quarter were 1.4 billion, down 7% from first quarter 2024. BMD reported segment EBITDA of 62.8 million in the first quarter compared to segment EBITDA of 83.6 million in the prior year quarter. BMD's gross margin dollars decreased 20.4 million from first quarter 2024, and our gross margin was 14.7%, a 40 basis point decline year over year. Turning to slide five, on a year over year basis, first quarter volumes for both LVL and I-JOIS were down 3%, better than the 6% year over year decline in single family housing starts. The pullback in starts stems from a consistent theme we hear from the builder community around moderating the pace of new starts as they continue to sell through higher than anticipated inventory levels. As it relates to pricing, sequential results for both LVL and I-JOIS were down 3% due to continued pricing pressure created by the constrained demand environment and competition for share. Turning to slide six, our first quarter plywood sales volume was 363 million feet compared to 372 million feet in first quarter 2024, primarily driven by the planned outage at our Oakdale mill. The 341 per thousand average plywood net sales price in the first quarter was down 10% on a year-over-year basis and down 3% sequentially. Moving to slide 7 and 8, B&B's year-over-year first quarter sales decline of 7% was driven by a 5% decrease in volume and a 2% decrease in price. By product line, commodity sales decreased 7%, general line product sales decreased 3%, and sales of EWP decreased 13%. Weather meaningfully influenced our sales activity in the first quarter, with our January and February daily pace below 21.5 million before March rebounded to exceed 24 million per day. As I mentioned earlier, B&B's first quarter gross margin percentage was 14.7%, down 40 basis points year over year. In particular, gross margin dollars were affected by lower sales volumes and decreased margins on commodity and EWP products. BMD's EBITDA margin was 4.5% for the quarter, down from the 5.6% reported in the year-ago quarter, a reflection of lower gross margin dollar opportunity from slower sales activity and the associated deleveraging of our cost base. However, it is important to again reference the improved sales velocity in March. which resulted in EBITDA margins for that month similar to levels seen in recent quarters. Our BMD team continues to consistently provide high service levels across a broad mix of best-in-class products, and as we have spoken to in the past, periods like now where there is near-term demand or price uncertainty allows us to again demonstrate the value proposition of two-step distribution. I'm now on slide nine. As we look forward to the second quarter, EWP volumes will be dependent upon new home sales and the pace at which builders begin new starts. Our EWP order files improve seasonally as we enter the second quarter, and we expect EWP volumes to increase by mid to high single digits sequentially. On EWP pricing, we expect to experience low single digit sequential declines as competition for share persists. In plywood, we expect seasonal strengthening and a partial restart at Oakdale to result in mid-single-digit sequential volume increases. On plywood pricing, quarter-to-date realizations are consistent with our first quarter average. The partial operating status at Oakdale is expected to negatively impact our financial results by roughly $5 million in the second quarter, independent of market conditions. With regard to BMV sales, April's daily sales pace accelerated from the strengthening we saw in March and was approximately 13% higher than the first quarter 2025 sales pace of $22.3 million per day. Our daily sales pace for the balance of the quarter will be dependent upon in-market demand and product pricing. Lastly, we expect approximately $38 million in total company depreciation and amortization, a 26% effective tax rate, and we have 37.6 million common shares outstanding as of April 30th. I'm now on slide 10. We had capital expenditures of $53 million in the first quarter with $31 million of spending in wood products and $22 million of spending in BMD. Our capital spending range for 2025 remains between $220 and $240 million. This range includes additional spending on our multi-year investments in support of our EWP production capabilities in the southeast that we have spoken to previously. At Oakdale, impacted machine centers are restarting in phases, and we are excited to have that facility fully operational again by the end of the second quarter. The Thorsby I line is expected to be operational in the first half of 2026. In BMD, we have made great progress on our greenfield distribution in Hondo, Texas, where construction is roughly 80% complete, and we look forward to its initial startup by the end of the third quarter. Speaking to shareholder returns, we paid $10 million in regular dividends during the quarter. Our board of directors also recently approved a $0.21 per share quarterly dividend on our common stock. Shareholders of record as of June 2nd will receive payment of this dividend on June 18th. Through the first four months of 2025, we repurchased 71 million of our common stock, 54 million in the first quarter, and another 17 million in April. Today, we have about 1.1 million shares available for repurchase under our current share repurchase program. Not unexpectedly, our cash position declined in the first quarter due to seasonal increases in working capital and the previously referenced capital investments and shareholder returns. Our balance sheet remains strong, and we continue to be dedicated to a balanced deployment of capital by investing in our existing asset base, pursuing organic growth opportunities, and returning capital to our shareholders. We also maintain the flexibility to execute M&A if opportunities emerge that align with our growth strategy. I will now turn it back over to Nate to share our business outlook and closing remarks.

Thanks, Kelly. I'm at slide number 11. Given the current environment, 2025 end market demand expectations remain difficult to predict, with most forecasts for housing ranging between flat to mid single digit declines. Our first quarter results impacted meaningfully by seasonal factors and our purposeful strategic investments are in no way a good indicator of how end market demand and our financial results will play out for the balance of 2025. But expectations for the remainder of the year are unclear as significant macroeconomic uncertainties and elevated mortgage rates have dampened consumer and homebuilder confidence. However, what we do have great clarity is in the strength of our team and our ability to execute at a high level across all market conditions. We remain both steady and agile. We'll be prepared to respond as the economic situation changes and remain resolute in our service to our customer and supplier partners. The long-term demand drivers for our business remain strong, characterized by undersupply in housing units, aging U.S. housing stock, and elevated levels of homeowner equity. The structural demand built into the housing market and our robust balance sheet provide us the ability to stay focused on the execution of our strategy and creation of long-term value for our stakeholders. Thank you for joining us today and for your continued support and interest in Boise Cascade. We welcome any questions at this time. Rivka, would you please open the phone lines?

Thank you. At this time, we'll conduct a question and answer session. To ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Susan McLaury of Goldman Sachs. Your line is now open.

Thank you. Good morning, everyone. Good morning. I wanted to start on the general line side of the business. I guess, you know, given the shifts in the macro that we've seen through the quarter, any thoughts on what you're hearing from some of your key suppliers there, positions of those inventories? And, you know, you also mentioned the benefit of a two-step distribution model in this environment. I guess, you know, what are you also hearing from customers and how are they leveraging that service there to help with their own inventories in the channel.

Hey Sue, it's Nate. I'll start the conversation and then Joe and Jeff and others can jump in as needed. I think overall what we're seeing is that customers specific to the general line category are really dependent on two-step distribution in terms of the auto warehouse support on units, job packs, pieces, maybe as compared to full heavy line direct shipments. So that out-of-warehouse support continues to remain a theme, and we're seeing that in terms of both expectations from our suppliers in General Line, as well as how our customers, in terms of how they're thinking about, to your point, on their working capital positions. I think the other thing that we're experiencing with our General Line, which is really good, is their introduction of new products, new SKUs. And so that kind of creates... different maybe narrative in the marketplace where customers may be hesitant to bring some of those new items in because they just don't know maybe the strength or the kind of the cadence of some of those new products and so their dependency on on two-step distribution BMD remains very high so I think overall you know we're look to as you know probably even more important today just in providing those those just-in-time services and as our customers are managing their working capital. And again, they're working that kind of risk and reward on having inventory levels, both on demand and also on price realization. So overall, it feels steady and consistent. And again, two-step distribution is really an important part of that equation.

Okay, that's very helpful, Nate. And then you mentioned that the Oakdale project is progressing. It sounds like that's gone well. Any thoughts as you start to bring that back online relative to the macro environment that we're in and how you're positioned in terms of ramping that up?

Good morning, Susan. This is Troy. Yeah, I mean, when that comes back online, the majority of that veneer goes into our EWP side. So we've been buying veneer on the open market right now to supplement that. So when they come back online, that veneer will shift back into the EWP. There will be some, let's say, limited plywood volume that will come along with that. But we'll just offset what we're buying on the open market and continue and then adjust to, you know, production as necessary depending on demand.

Okay. All right. And then I'm going to squeeze one last one in, which is, you know, it was nice to see the comments on the capital allocation and, you know, potential for the buybacks. Can you talk a bit more how you're thinking about those priorities for this year, just given the world that we're in, and anything of note on the M&A pipeline?

Yeah. Hi, Sue. This is Kelly. So, nothing of – I'll take your question in reverse order a bit here. Nothing of note on the M&A pipeline. I think, you know, there's still some inbounds, but I think, you know, given kind of this near-term uncertainty, I think it's been a little bit quieter. in terms of inbounds of late. But we're still certainly interested to grow via M&A if that right opportunity presents itself. And then in terms of capital allocation in general, our script and our narrative is very much the same. We're excited about the good amount of organic project work we have ahead of us, and we'll expect to continue to be opportunistically in a thoughtful way in the market regarding share repurchases.

All right. Well, thank you all for the color, and good luck with everything.

Thank you, Sue. Thanks, Sue.

One moment for our next question. Our next question comes from the line of Kurt Yinger of DA Davidson. Your line is now open.

Great, thanks, and good morning, everyone. Good morning, Kurt. I just wanted to start off on EWP pricing. Kelly, not to pin you down, all that much. But I guess directionally, would you expect kind of Q2 versus Q1 sequential pressures to be kind of about the same or maybe even lessening a little bit? And then I'm hoping you could also just talk a little bit more about the competitive dynamics. And as you've kind of moved into March and April and seen some seasonal strengthening, whether any of those pressures may be alleviating a little bit or if there's kind of light at the end of the tunnel that you guys are seeing at this stage.

Yeah, sure, Curt. I'll start and then maybe Nate and Troy and others can fill in. So in terms of the sequential guide, yeah, we did say low single digit again. I think we were off roughly 3% sequentially here in the first quarter. You know, we still have May and June to come and it's still a very competitive environment out there. But yeah, if I guess I would guide to a similar percentage to what we experienced in the first quarter in terms of sequential. But again, we'll see how May and June turn out. In terms of the underlying activity, like I alluded to in my comments, the order file and EWP did seasonally strengthen pretty nicely here in April. But at the end of the day, we're still around a seasonally adjusted annual rate on single-family housing starts that's probably less than a million, right? And so we're still an environment where there's still competition for share. And so until we see more strength in the underlying demand, I think we'll need to see that before we see some levelization on pricing.

Hey, Curtis, maybe just to add to that, I think generally Q2 and the kind of the seasonal change represents where maybe there's overall less focus on pricing on a range of products and services, and people really get centered on execution and serving the marketplace. So we'll see how that narrative plays out through the quarter, but generally, and history would tell us, second quarter generally is, again, more execution focused and less on kind of setting up programs and some of the details around that. I think the other narrative for us is on when it comes to home builder focus, they continue to stay focused on obviously their input costs, but also cycle times. And as you think about EWP and its ability to compete and win relative to other options that are out there, whether it's dimensional lumber or even plated floor trusses, EWP is certainly an answer in terms of affordability and relative to open web trusses and also creates that kind of that speed and simplicity on the job site, which again remains important for the builder. Those would be maybe two backdrops as we transition into the building season, and we'll obviously be watching both of those carefully.

Got it. Okay.

That's helpful.

Thank you. And then, Kelly, just on the Oakdale impact, the $5 million, I assume that's on a year-over-year basis. And I guess with Troy's comments earlier around kind of buying open market veneer to supply EWP, is that kind of cost differential there? contemplated in some of the numbers you've talked about related to this outage, or would that be separate?

Yeah, good question, Kurt. So the first part, the $5 million is sequential. The expected impact is sequential in terms of the impact of Oakdale. And so we expect to continue to see some challenges there as we start up. But then in terms of the veneer, I spoke to, I think, 8 million and 7 million impacts on EBITDA from Oakdale. In fourth and first quarter, we were buying some amount of veneer, so there's not a lot of incremental cost of veneer impact into the second quarter. That was more of a year-over-year impact.

Okay. Got it. Perfect. And then lastly, just on BMD. You know, it sounds like general line is pretty stable. In terms of gross margin percentage, I guess, how much pressure are you seeing there in EWP? And if I guess we look at kind of the last two years outside of quarter to quarter noise, you know, you guys have been kind of 15% plus on gross margin. Is that still attainable for 2025 or?

um given some of these dynamics is is that maybe a little bit optimistic yeah no i think 15 is still certainly attainable and we're a little bit below that this quarter you know didn't didn't have a lot of opportunity on the commodity side and you know there was some competitive pressures but i think definitely 15 is it attainable given the mix shift we've seen and especially as we head here into the second third quarter where you start to see a bit a bit of a richer product mix typically so Short answer is yes on the 15%, Kurt.

Perfect.

All right. Thank you very much. Thank you. Thanks, Kurt.

One moment for our next question. Our next question comes from the line of George Staffos of Bank of America Securities. Your line is now open.

Hi, everyone. Good morning. Thanks for the details. Just a couple of quick ones to dig on to the existing questions that were asked. Can you talk a little bit about the competitive pressures in And are you seeing it more from existing engineered players, or are you seeing it more because of or from either dimensional or from folks producing open web trusses? Secondly, and it sounds like everything is fine here, but in terms of the 13% improvement that you're seeing in daily sales so far in 2Q, Any, you know, change or anything, any trend that we should be aware of in terms of mix, velocity, you know, again, it sounds like everything's fine, but I just want to check that box, guys.

So maybe on the EWP, let me say, Georgia State, just on the EWP side of things, I think, you know, what we're seeing is, you know, the narrative on 2x10s and open web trusts is largely consistent and steady, not a lot there. So where we generally see the competitive challenges is with EWP producers. And so that's something that we are committed to making sure we're competitive and market each and every day for our customers, both our direct customers as well as through the channel. And so that's been the backdrop in terms of the competitive nature. And that's been in place here for several quarters. So that would be, you know, probably, you know, kind of our current view on EWP and what we're seeing and what we're expecting there relative to the competitive nature.

Yeah, and then I guess the second part of your question, George, was around the 13% sequential increase we've seen so far in the daily sales pace in B&B, which that math tells you it's about $25 million a day through April. compared to the 22.3 we experienced in the first quarter. You know, I wouldn't say there's any big mix shift or anything like that. It's really just a function of, you know, the spring building season, better weather, and, you know, really out of the gates, you're pretty strong in April, which is great. And if you do the math, 25 million-ish a day times 64 days, you know, you'll see, you know, B&B kick out $1.6 billion or so in revenue. in the second quarter, which would be up $200 million sequentially. And so that gives you a good sense of the gross margin dollar opportunity and the better leverage you can get on a cost base that we expect to put up certainly an approved number here in the second quarter of BND.

Yeah, Kelly, I appreciate that. What I was getting at, and maybe could have posed the question differently, just it seems like momentum has actually continued or accelerated. It's not like we're at 13%, but there's been a fade more recently. I was more or less just confirming that or not, if you want to comment. Can you give us, along with that, can you give us a quick comment on the door strategy, how that's working? And are there any elements of the supply chain into BMD that we You know, should be mindful of relative tariffs, you know, any difficulties getting product that you need or you're in pretty good shape there. Thanks and good luck in the quarter.

Yeah. So, yeah, just a quick follow-up. Yeah. So that pace I referenced has, you know, has continued, you know, through the first few days in April. And so we feel good about that. And then in terms of the doors and supply chain, I'll let Jeff lead the conversation there.

Yeah, hey, this is Jeff. On the door side, that strategy is going well, and I'll tell you, the acquisitions we made, the newer shops, they're growing, and you can see it. And, you know, when you greenfield one as we have, you know, it's a process, and it takes time, and they certainly are. And then you have the acquisitions, and they're obviously faster. But you can see them growing, and then legacy ones we have, they've picked up significantly. So, you know, it's working just the way we want it.

Okay, and on tariffs and supply chain?

Yes, George. It's Nate. Yeah, I would say in tariffs, I would say overall for both for wood products and BMD, there's kind of limited impact. For us, it's a pretty defined risk, both in wood products. Most of our production, as you know, is US-based. And so that doesn't really represent an issue for us in wood products, given the current environment today. For distribution, As you know, our philosophy overall is when we have to pass along pricing changes or cost increases that we experience, so terrace would represent a very similar theme as to anything else that we would think about there. Specific to, there are some certain products, if you think about in our general line, many of our metal products are imported, and in some cases, Georgia's limited options on where you can pull those materials from. I guess the good news here is we have some familiarity with the story just given the COVID issues in terms of the resiliency and kind of the redundancy in some cases with our supply chain. And that remains part of our plan going forward. But relatively, the impact is very, very modest today. And if anything, it would be general line just on some of those, again, kind of the metal products would be the area that we're currently focused.

Thanks so much, Nate. Good luck in the quarter, guys. Thanks.

One moment for our next question. Our next question comes from the line of Jeff Stevenson of Loop Capital. Your line is now open.

Hey, good morning, guys. This is actually Zach Pacheco on for Jeff this morning. Hey, how are you guys doing? Maybe to start, given the current pricing environment, can you just provide some more colors specifically on how you're looking at LVL kind of through the remainder of the year, more on the volume side? I believe last quarter share gains were called out as a positive, so just curious if there's any update from a share gain perspective. Thanks.

Yeah, as Kelly mentioned, Q1 we were down 3%, not quite as much as the housing starts. Also, he referenced the fact that so far starting into Q2, we're starting to see LVL in particular actually start outpouring. And then as indicated, you know, we're still looking for that, you know, seasonal bump in volumes that we've indicated in the chart. I don't think we've got any more on that.

Yeah, no, I think Troy covered it pretty well other than I guess where I would add is that I think we've pretty consistently shown that our share of production as well as our volumes relative to single-family starts have looked very strong. And again, we think that's very much a function of one having best-in-class products and best-in-class distribution tied together, and we continue to believe that's the right approach.

Understood. And then maybe just quickly on BMD, how attainable or how confident is the team on a sequential improvement in terms of EBITDA margins to add or above 5% in the next quarter, given the adverse weather you're experiencing this quarter, or do you think softer residential demand fundamentals are continued to weigh on segment margins? Thanks.

Yeah, so, yeah, I feel good about, and I alluded to this a bit in my comments, that March, you know, when we saw a more normal sales pace, we got our EBITDA margins back to what you've seen in recent quarters, you know, kind of that that mid five range, if you will. And so given where we've started in April, and given the pace we've seen, we feel really good about our opportunity to again be in the mid fives for second quarter. And then a couple other comments here from Joe.

Yeah, hi there. So as far as competitive positioning in the market, I think we're set up really well. Our national footprint allows us to shift our volume into pockets of strength across the country. Also helps us to service the national dealers who want and need consistent service across the country. We're aligned with many of the big builders and the dealers and their strength in times of market weakness, but at the same time, our decentralized model allows us to support and serve the local and regional dealers and builders as well and be flexible to their needs. We've got great partnerships with our customers, with our suppliers. And really, our integrated model of manufacturing is a key part of driving our success.

Makes sense. Thanks for the call.

Thank you, Zach.

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. Our next question comes from the line of Ketan Memtora of BMO Capital Markets. Your line is now open.

Thank you, and good morning. Perhaps to start with, on Q2 EWC volumes, and if I'm doing my math correctly here, it sounds like on IJOYS, you know, volumes would be down about double digits on a year-over-year basis. Kelly, can you talk about sort of, you know, puts and takes, you know, what's kind of driving that, you know, sort of a pretty meaningful year-over-year decline in volumes?

Yeah, I think it's really just a function of housing starts last year versus the housing start assumption for this year, Keaton. It's really that. It's not, in my view, a loss of market share or a change in usage in terms of floor products. It's not that. It's really just a function of the underlying market conditions today.

I see. Okay. Got it. And then, you know, if I look at your inventories at the end of Q1 versus kind of your total inventories at the end of, you know, Q1 of last year, it's again up like, I don't know, 12%, 13%, something in that range. Can you sort of talk to how you sort of feel about the overall level of inventories given sort of the housing backdrop, which has been, you know, sort of choppier? You know, we've talked about things off to a slower than expected start.

Yeah, let me let Jeff kind of field that initially, the question around inventory and what we're seeing, what we're at here in the first quarter and relative to our expectations.

Hey, it's Jeff. Yeah, our inventory position, you know, we feel good about it. When the winter buys came and opportunities for buys, we fully took advantage of that and leaned into that pretty heavily. We also look at, you know, with the market that we're in right now, we know it is very much a distribution-friendly market, and people are relying on us. Our suppliers are relying on us to have it, and our customers are relying on us to have it and get them there on time. So we've leaned into that and made sure that we're stocked and ready for that. On the dealer side of things, what we're seeing out there, without a doubt, it is lean overall. A couple areas where it might be heavy if they leaned in for tariffs, but overall it is lean and people are relying on distribution, and we're ready to serve. Understood.

That's helpful, Carlos. And then, you know, maybe last one for Nate. You know, there's been, you know, a couple of transactions here recently, you know, one, you know, on kind of, you know, one of your kind of supplier side and then one on the, you know, pro dealer side. Pretty meaningful transaction. How do you, you know, sort of think about potential impact, if any, you know, over the next several years here?

Yeah, good question, Keaton. I think when it comes to your point, some of the consolidation that's taken place, both upstream and downstream, you know, from Boise Cascade, you know, that has been, you know, a theme here over the past number of years and certainly is continuing and obviously some important examples in front of us today. I think as we, you know, so we are, I think, well positioned in the marketplace and well positioned with those relationships. And I think the council that we continue to work internally and externally is we're going to stay really focused on the here and now and execute at a very high level for the benefit of both those suppliers and what our customers deserve and expect going forward. So I think we are in a very important part of the equation for our suppliers, and we've got to continue to earn that each and every day. Same with our customers. But the consolidation, those trends, those have been taking place. We expect those likely to take place going forward. And that just really requires us to make sure that we're focused on executing at a very, very high level each and every day.

Got it. That's very helpful. Good luck. Thank you.

One moment for our next question. Our next question comes from the line of Ruben Garner of Benchmark. Your line is now open.

Thank you. Good morning, guys. Apologies if I repeat anything. I missed the first part of the call. Big picture question for you, and correct me if I'm looking at this wrong, but I think the volume for iJoyce and LVL is kind of round-tripped back to pre-2020 levels for you guys. But on a higher level of start, is the difference between what you would have seen back then and today size and type of homes, or is there some other dynamic? Are you guys thinking about your volume versus your price differently than maybe you did five or six years ago? Just any color there would be helpful.

Yeah, Ruben, it's Nate. Good question. I think in terms of what we're experiencing, I don't think it's anything in terms of kind of change of I-joys versus maybe open web or dimensional lumber. There can be some around the edges. I think much of that is probably around maybe home size and the home footprint, and also where that construction, where that start resides. So in some examples, for example, if you're in a market like Phoenix, it's a slab-on-gray market, single-story construction. That represents a much different opportunity than compared to Denver, Colorado, as an example, where typically two-story construction with a basement. So I think in terms of where that start resides and the strength that we've seen in the sunshine states, the Floridas and Texas and Arizona, I think that's been a contributing factor in terms of what that real floor opportunity represents for IJOYST and framing materials here today in 2025.

And so, Nate, as that relates to price, I mean, your pricing is still up nicely since then. I'm sure you have a ton of areas of inflation in your own regard, but how do we think about just kind of downside from here, given where the volume environment is? What does the supply or capacity utilization for the industry look like today versus maybe what it did, you know, in that period five, six years ago?

Yeah, so capacity realization today for the first quarter, for us, we were at a pretty strong rate given the environment. We were kind of between 75% and 80%. And in April, we were above that level. It was probably low 80s. And so I don't have 2019 still in my memory bank, but I think Our operating rate relative to the demand environment today we feel good about, and again, having the connection between manufacturing and distribution is important.

Great. Thanks, guys, and good luck in this coming quarter.

Thank you, Ruben. Thanks, Ruben.

I am showing no further questions at this time. I would now like to turn it back to Nate Jorgensen, CEO, for closing remarks.

Great. Thanks. We appreciate everyone joining us this morning for our update and earnings call. Thank you for your continuing interest and support of Boise Cascade. Be safe and be well. Thank you.

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.