Boise Cascade Company (NYSE: BCC) reported first quarter 2025 results that reflect significant headwinds from a slowing US housing market, persistent cost pressures, and strategic downtime at key facilities.
The building materials and wood products supplier posted a steep decline in both net income and revenue, highlighting the challenges facing the broader construction sector this year.
Q1 2025 Financial Highlights
- Net Income: $40.3 million, or $1.06 per diluted share, down 61% from $104.1 million ($2.61 per share) in Q1 2024
- Revenue: $1.54 billion, a 6.6% year-over-year decrease, but slightly ahead of analyst expectations
- Adjusted EBITDA: $91.6 million, below consensus estimates
- Operating Margin: 3.5%, down sharply from 8.0% a year ago
- Free Cash Flow: -$81.7 million, reflecting higher working capital needs and capital expenditures
Segment Performance
Wood Products:
Sales in the Wood Products segment fell 11% to $415.8 million, driven by lower prices and volumes for engineered wood products (LVL, I-joists) and plywood. Segment income plunged 75% to $17.7 million, with the company citing higher conversion costs due to planned modernization downtime at its Oakdale, Louisiana mill.
Building Materials Distribution (BMD):
BMD sales declined 7% to $1.41 billion, as both sales volumes and prices dropped. Segment income fell 33% to $48.4 million, primarily due to lower gross margins on commodity and engineered wood products.
Market and Operational Context
Boise Cascade’s results mirror broader industry trends: US single-family housing starts dropped 6% in the quarter, directly impacting demand for the company’s core products. Management pointed to constrained demand, challenging weather, and macroeconomic uncertainty-including elevated mortgage rates and cautious consumer sentiment-as key factors behind the weaker results.
Despite the tough quarter, CEO Nate Jorgensen emphasized the company’s resilience and strategic flexibility, noting that Boise Cascade ended Q1 with $561.8 million in cash and equivalents and $395.7 million in undrawn credit, providing nearly $1 billion in available liquidity.
Capital Allocation and Shareholder Returns
- Dividends: The board declared a quarterly dividend of $0.21 per share, payable June 18, 2025.
- Share Repurchases: The company repurchased about 482,700 shares in Q1 for $53.9 million and an additional 179,445 shares in April for $17 million.
Capital expenditures for 2025 are projected at $220–$240 million, with management reiterating its commitment to ongoing strategic investments despite near-term uncertainty.