Boise Cascade said the “expected weaker environment” from lower new single-family starts and commodity product prices was “evident” during the company’s fiscal first quarter. Boise Cascade reported net income of $96.7 million on sales of $1.5 billion for the first quarter, compared to net income of $302.6 million on sales of $2.3 billion in the prior-year period.
“Despite [the] headwinds, the strength and resilience of our business model and our associates were in clear view as the company delivered solid financial results,” Nate Jorgensen, CEO of Boise Cascade, said in a prepared statement. “As we look to the second quarter, economic uncertainties persist, but we remain focused on providing high service levels to our vendor and customer partners. The strength of our balance sheet also allows us to remain committed to our strategies and the continued execution of our growth initiatives.”
Wood product sales, including sales to building materials distribution (BMD), decreased 22% on a year-over-year basis to $437.4 million in the first quarter. The decrease was driven by lower plywood sales prices and lower sales volumes for I-joists and engineered wood products (EWP). The decreases were partially offset by higher plywood sales volumes and higher EWP sales prices.
Segment income for wood products decreased $120.7 million to $69.4 million for the first quarter. The decrease was due primarily to lower plywood sales prices and lower EWP sales volumes, according to Boise Cascade. Segment income was also negatively impacted by higher per-unit conversion costs and an increase in depreciation and amortization expense due to the acquisition of two plywood facilities in July of 2022.
BMD sales decreased 35% year-over-year to $1.4 billion for the fiscal first quarter. The decrease was driven by sales price and sales volume decreases of 20% and 15%, respectively, according to Boise Cascade. Commodity sales decreased 50%, general line product sales decreased 13%, and sales of EWP decreased 24%.
Segment income decreased $156.2 million to $69.7 million for the first quarter. The decrease in segment income was driven by a gross margin decrease of $177.3 million, resulting from lower margins on commodity products and lower sales volumes.
Boise Cascade reported adjusted EBITDA decreased 63% year-over-year to $158.7 million in the first quarter of 2023.
Boise, Idaho-based Boise Cascade is a producer of engineered wood products and plywood and a wholesale distributor of building products.