Q1 sales fall at Boise Cascade
Boise Cascade Company reported first quarter sales declined 34% to $1.54 billion from first quarter 2022 sales of $2.33 billion.
The Boise, Idaho-based building products manufacturer and distributor also saw its first quarter net income fall to $96.7 million compared to a first quarter net income of $302.6 million.
Sales of wood products, including sales to its own Building Materials Distribution (BMD) business, decreased $121.5 million, or 22%, to $437.4 million as compared to first quarter 2022 sales of $558.9 million.
The segment’s income dropped to $69.4 million for the period as compared to an income of $190.1 million for the same period a year ago.
The company attributed the declines to lower plywood sales prices and lower engineered wood product (EWP) sales volumes.
These decreases in segment income were offset partially by higher EWP sales prices and higher plywood sales volumes, as well as lower OSB costs (used in the manufacture of I-joists), Boise Cascade said.
BMD sales decreased 35% to $1.38 billion for the quarter from sales of $2.11 billion in the prior first quarter., The overall decrease in sales was driven by sales price and sales volume decreases of 20% and 15%, respectively.
By product line, commodity sales decreased 50%, general line product sales decreased 13%, and sales of EWP decreased 24%.
BMD income decreased to $69.7 million from $225.9 million in the first quarter a year ago. quarter. The decrease in segment income was driven by a gross margin decrease of $177.3 million, resulting primarily from lower margins on commodity products and lower sales volumes.
Boise Cascade Company is one of the largest producers of engineered wood products and plywood in North America and a major wholesale distributor of building products.
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The Bottom Line: Sagging commodity prices and soft new home sales drive sales and profits down for the first quarter.
What the CEO said: “During the first quarter, the expected weaker environment from lower new single-family starts and commodity product prices was evident. Despite those headwinds, the strength and resilience of our business model and our associates were in clear view as the Company delivered solid financial results,” stated Nate Jorgensen, CEO of Boise Cascade. “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.”
Company Info: Click here to read the full first quarter 2023 financial report from Bosie Cascade.