Boise Cascade Stock

Boise Cascade Company (Boise Cascade) operates as a producer of engineered wood products (EWP) and plywood in North America and a U.S. wholesale distributor of building products.

As a leading manufacturer and distributor of building materials, the company brings people, products, and services together to build strong homes, businesses, and communities that stand the test of time.

Segments

The company operates through two reportable segments, Wood Products and Building Materials Distribution.

In the company’s Wood Products segment, the company manufactures laminated veneer lumber (LVL), I-joists, and laminated beams, which are collectively referred to as EWP. In addition, the company manufactures structural, appearance, and industrial plywood panels, and ponderosa pine lumber.

The company’s Building Materials Distribution segment (BMD) is the largest customer of the company’s Wood Products segment and operates a nationwide network of distribution facilities that sell a broad line of building materials, including oriented strand board (OSB), plywood, and lumber (collectively referred to as commodities); general line items, such as siding, composite decking, doors and millwork, metal products, roofing, and insulation; and EWP. Substantially all of BMD's EWP is sourced from the company’s Wood Products segment, with the remaining products the company distribute sourced from a broad vendor base of third-party suppliers ranging from large manufacturers to small regional producers.

The company’s products are used in the construction of new residential housing, including single-family, multi-family, and manufactured homes, the repair-and-remodeling of existing housing, the construction of light industrial and commercial buildings, and industrial applications. The company has a broad base of national and local customers, which includes a diverse mix of dealers, home improvement centers, leading wholesalers, specialty distributors, and industrial converters. Drivers of new residential construction, residential repair-and-remodeling activity, and light commercial construction include new household formation, the age of the housing stock, availability of credit and other macroeconomic factors, such as GDP growth, population growth and migration, interest rates, employment, and consumer sentiment.

Wood Products

Products

LVL and laminated beams are structural products used in applications where extra strength and consistent quality are required, such as headers and beams. LVL is also used in the manufacture of I-joists, which are assembled by combining a vertical web of OSB with top and bottom LVL or solid wood flanges. I-joists, which are used primarily in residential and commercial flooring and roofing systems and other structural applications, are stronger, lighter, and straighter than conventional lumber products. Plywood is used in a wide range of structural, interior, and exterior applications within the residential, industrial, and repair and remodel sectors. The company also produces ponderosa pine shop lumber, which is sold primarily to industrial converters, and ponderosa pine appearance grade boards that are sold to home centers and dealers.

Sales, Marketing, and Distribution

The company’s EWP sales force is managed centrally through a main office that oversees regional sales teams. The company’s sales force spends a significant amount of time working with end customers who purchase the company’s EWP. The company’s sales force provides a variety of technical support services, including integrated design, engineering, product specification software, distributor inventory management software, and job-pack preparation systems. Sales of plywood are handled in multiple locations, with management located centrally at headquarters.

In 2023, EWP and plywood accounted for 58% and 32%, respectively, of the company’s Wood Products sales. The majority of the company’s wood products are sold to leading wholesalers (including the company’s BMD segment), home improvement centers, dealers, and industrial converters in North America. The company’s BMD segment is the company’s Wood Products segment's largest customer, representing approximately 66% of the company’s Wood Products segment's overall sales in 2023. In 2023, 78% and 42% of the company’s Wood Products segment's EWP and plywood sales volumes, respectively, were to the company’s BMD segment.

Building Materials Distribution

Products

The company sells a broad line of building materials, including OSB, plywood, and lumber (collectively commodities); general line items, such as siding, composite decking, doors and millwork, metal products, roofing, and insulation; and EWP. Except for EWP, the company purchases most of these building materials from a broad base of third-party suppliers ranging from large manufacturers, such as Canfor, Commercial Metals Company, Hampton Lumber, Huber Engineered Woods, James Hardie Building Products, Louisiana-Pacific, Therma-Tru Doors, Trex Company and West Fraser, to small regional producers. Substantially all of the company’s EWP is sourced from the company’s Wood Products segment. The company’s products are used in the construction of new residential housing, including single-family, multi-family, and manufactured homes, the repair-and-remodeling of existing housing, the construction of light industrial and commercial buildings, and other industrial applications.

Sales, Marketing, and Distribution

The company markets its building materials primarily to dealers, home improvement centers, and specialty distributors that then sell the products to end customers, who are typically homebuilders, independent contractors, and homeowners engaged in residential construction and repair-and-remodeling projects. The company also markets its products to a wide variety of industrial accounts, which use the company’s products to assemble cabinets, doors, agricultural bins, crating, and other products used in industrial and construction applications.

The company sells products through two primary distribution channels: warehouse sales and direct sales. Warehouse sales are delivered from the company’s distribution centers to its customers, and direct sales are shipped from the manufacturer to the customer without the company taking physical possession of inventory. Each of the company’s distribution centers implements its own distribution and logistics model using centralized information systems.

The company has a large, decentralized sales force to support the company’s suppliers and customers.

Customers

The company’s customer relationships range from locally owned single-location facilities to large national dealers and home improvement centers across the U.S., with Builders FirstSource and Home Depot being the company’s largest customers. Substantially all sales to Builders FirstSource were recorded in the company’s BMD segment, and sales to Home Depot were recorded in the company’s BMD and Wood Products segments.

Competition

Wood Products

In EWP, the company competes against several major North American EWP producers, such as Weyerhaeuser Company, Pacific Woodtech Corporation, and Roseburg Forest Products. In plywood, the company competes with Georgia-Pacific and Roseburg Forest Products.

Building Materials Distribution

The company’s wholesale distribution competitors include BlueLinx Holdings Inc., Specialty Building Products Inc., Weyerhaeuser Company, Dixie Plywood and Lumber, OrePac, Woodgrain Inc., and Capital Lumber, among others.

Business Strategies

The company’s business strategies are to increase both its earnings and earnings stability; leverage the company’s integrated model; and accelerate pace of innovation & digital technology, and diversity, equity & inclusion.

In BMD, the company’s growth strategy includes adding products and services, expanding the company’s market penetration via acquisition or the opening or expansion of locations in underserved markets, and identifying and executing upon adjacent distribution platforms that can be scaled.

Seasonal Influences

The company is exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors. These seasonal factors are common in the building products industry. Seasonal changes in levels of building activity affect the company’s building products businesses, which are dependent on housing starts, repair-and-remodeling activities, and light commercial construction activities. The company typically reports lower sales volumes in the first and fourth quarters (year ended December 2023) due to the impact of poor weather on the construction market, and the company generally has higher sales volumes in the second and third quarters, reflecting an increase in construction due to more favorable weather conditions. The company typically has higher working capital in the first and second quarters in preparation and response to the building season. Seasonally cold weather increases costs, especially energy consumption costs, at most of the company’s manufacturing facilities.

Trademarks

The company maintains many trademarks for its manufactured wood products, particularly EWP. The company’s key registered trademarks include BOISE CASCADE and the TREE-IN-A-CIRCLE logo, which are perpetual in duration as long as the company continues to timely file all post registration maintenance documents related thereto. These key trademarks to be of significant importance to the company’s business.

History

Boise Cascade Company was founded in 2004. The company was incorporated in 2004.