Condensed Notes to Unaudited Quarterly Consolidated Financial Statements
1. Nature of Operations and Consolidation
Nature of Operations
Boise Cascade Company is a building products company headquartered in Boise, Idaho. As used in this Form 10-Q, the terms "Boise Cascade," "we," and "our" refer to Boise Cascade Company and its consolidated subsidiaries. We are one of the largest United States wholesale distributors of building materials and a leading manufacturer of engineered wood products (EWP) and plywood in North America.
We operate our business using two reportable segments: (1) Building Materials Distribution (BMD), which is a wholesale distributor of building materials, and (2) Wood Products, which primarily manufactures EWP and plywood. For more information, see Note 11, Segment Information.
Consolidation
The accompanying quarterly consolidated financial statements have not been audited by an independent registered public accounting firm but, in the opinion of management, include all adjustments necessary to present fairly the financial position, results of operations, cash flows, and stockholders' equity for the interim periods presented. Except as disclosed within these condensed notes to unaudited quarterly consolidated financial statements, the adjustments made were of a normal, recurring nature. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. The quarterly consolidated financial statements include the accounts of Boise Cascade and its subsidiaries after elimination of intercompany balances and transactions. Quarterly results are not necessarily indicative of results that may be expected for the full year. These condensed notes to unaudited quarterly consolidated financial statements should be read in conjunction with our 2025 Form 10-K and the other reports we file with the Securities and Exchange Commission.
2. Summary of Significant Accounting Policies
Accounting Policies
The complete summary of significant accounting policies is included in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2025 Form 10-K.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets, and other long-lived assets; legal contingencies; guarantee obligations; indemnifications; assumptions used in retirement, medical, and workers' compensation benefits; assumptions used in the determination of right-of-use (ROU) assets and related lease liabilities; stock-based compensation; fair value measurements; income taxes; and vendor and customer rebates, among others. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.
Revenue Recognition
Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For revenue disaggregated by major product line for each reportable segment, see Note 11, Segment Information.
Fees for shipping and handling charged to customers for sales transactions are included in "Sales" in our Consolidated Statements of Operations. When control over products has transferred to the customer, we have elected to recognize costs related to shipping and handling as fulfillment costs. For our BMD segment, costs related to shipping and handling of $64.6 million and $60.2 million for the three months ended March 31, 2026 and 2025, respectively, are included in "Selling and distribution expenses" in our Consolidated Statements of Operations. In our BMD segment, our activities relate to the purchase and resale of finished products, and excluding shipping and handling costs from "Materials, labor, and other operating expenses (excluding depreciation)" provides us a clearer view of our operating performance and the effectiveness of our sales and purchasing functions. For our Wood Products segment, costs related to shipping and handling are included in "Materials, labor, and other operating expenses (excluding depreciation)" in our Consolidated Statements of Operations. In our Wood Products segment, we view our shipping and handling costs as a cost of the manufacturing process and the movement of product to our end customers.
Customer Rebates and Allowances and Cash Discounts
Rebates are provided to our customers and our customers' customers based on the volume of their purchases, among other factors such as customer loyalty, conversion, and commitment, as well as temporary protection from price increases. We provide the rebates to increase the sell-through of our products. Rebates are generally estimated based on the most likely amount to be paid and recorded as a decrease in "Sales." At March 31, 2026 and December 31, 2025, we had $53.7 million and $83.5 million, respectively, of rebates payable to our customers recorded in "Accrued liabilities, Other" on our Consolidated Balance Sheets. We also estimate expected cash discounts on trade accounts receivable based on an analysis of historical experience and record cash discounts as a decrease in "Sales." We adjust our estimate of revenue at the earlier of when the probability of rebates paid and cash discounts provided changes or when the amounts become fixed. There have not been significant changes to our estimates of rebates, although it is reasonably possible that a change in the estimate may occur.
Vendor Rebates and Allowances
We receive rebates and allowances from our vendors under a number of different programs, including vendor marketing programs. At March 31, 2026 and December 31, 2025, we had $11.7 million and $17.4 million, respectively, of vendor rebates and allowances recorded in "Receivables, Other" on our Consolidated Balance Sheets. Rebates and allowances received from our vendors are recognized as a reduction of "Materials, labor, and other operating expenses (excluding depreciation)" when the product is sold, unless the rebates and allowances are linked to a specific incremental cost to sell a vendor's product. Amounts received from vendors that are linked to specific selling and distribution expenses are recognized as a reduction of "Selling and distribution expenses" in the period the expense is incurred.
Leases
We primarily lease land, buildings, and equipment under operating and finance leases. We determine if an arrangement is a lease at inception and assess lease classification as either operating or finance at lease inception or upon modification. Substantially all of our leases with initial terms greater than one year are for real estate, including distribution centers, corporate headquarters, land, and other office space. Substantially all of these lease agreements have fixed payment terms based on the passage of time and are recorded in our BMD segment. Many of our leases include fixed escalation clauses, renewal options and/or termination options that are factored into our determination of lease term and lease payments when appropriate. Renewal options generally range from one to ten years with fixed payment terms similar to those in the original lease agreements. Some lease agreements provide us with the option to purchase the leased property at market value. Our lease agreements do not contain any residual value guarantees.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. The current portion of our operating and finance lease liabilities are recorded in "Accrued liabilities, Other" on our Consolidated Balance Sheets.
We use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. In determining our incremental borrowing rates, we give consideration to publicly available interest rates for instruments with similar characteristics, including credit rating, term, and collateralization.
For purposes of determining straight-line rent expense, the lease term is calculated from the date we first take possession of the facility, including any periods of free rent and any renewal option periods we are reasonably certain of exercising. Variable lease expense generally includes reimbursement of actual costs for common area maintenance, property taxes, and insurance on leased real estate and are recorded as incurred. Most of our operating lease expense is recorded in "Selling and distribution expenses" in our Consolidated Statements of Operations. In addition, we do not separate lease and non-lease components for all of our leases.
Our short-term leases primarily include equipment rentals with lease terms on a month-to-month basis, which provide for our seasonal needs and flexibility in the use of equipment. Our short-term leases also include certain real estate for which either party has the right to cancel upon providing notice of 30 to 90 days. We do not recognize ROU assets or lease liabilities for short-term leases.
Inventories
Inventories included the following (work in process is not material):
| | | | | | | | | | | | | | |
| | | March 31,
2026 | | December 31,
2025 |
| | | (thousands) |
| Finished goods and work in process | | $ | 772,532 | | | $ | 672,173 | |
| Logs | | 38,593 | | | 57,309 | |
| Other raw materials and supplies | | 66,670 | | | 66,242 | |
| | | $ | 877,795 | | | $ | 795,724 | |
Property and Equipment
Property and equipment consisted of the following asset classes:
| | | | | | | | | | | | | | |
| | | March 31,
2026 | | December 31,
2025 |
| | | (thousands) |
| Land | | $ | 104,393 | | | $ | 98,267 | |
| Buildings | | 440,544 | | | 430,204 | |
| Improvements | | 83,612 | | | 82,568 | |
| Mobile equipment, information technology, and office furniture | | 326,703 | | | 322,907 | |
| Machinery and equipment | | 1,133,194 | | | 1,130,806 | |
| Construction in progress | | 105,046 | | | 99,340 | |
| | | 2,193,492 | | | 2,164,092 | |
| Less: accumulated depreciation | | (1,037,525) | | | (1,006,831) | |
| | | $ | 1,155,967 | | | $ | 1,157,261 | |
At March 31, 2026 and December 31, 2025, we had $3.7 million and $13.5 million, respectively, of accrued purchases of property and equipment.
Fair Value
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy under GAAP gives the highest priority to quoted market prices (Level 1) and the lowest priority to unobservable inputs (Level 3). In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value (Level 1). If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, we use quoted prices for similar assets and liabilities or inputs that are observable either directly or indirectly (Level 2). If quoted prices for identical or similar assets are not available or are unobservable, we may use internally developed valuation models, whose inputs include bid prices, and third-party valuations utilizing underlying asset assumptions (Level 3).
Financial Instruments
Our financial instruments are cash and cash equivalents, accounts receivable, accounts payable, and long-term debt. Our cash is recorded at cost, which approximates fair value, and our cash equivalents are money market funds. As of March 31, 2026 and December 31, 2025, we held $324.5 million and $448.7 million, respectively, in money market funds that are measured at fair value on a recurring basis using Level 1 inputs. The recorded values of accounts receivable and accounts payable approximate fair values based on their short-term nature. At March 31, 2026 and December 31, 2025, the book value of our fixed-rate senior notes for each period was $400.0 million, and the fair value was estimated to be $392.8 million and $395.0 million, respectively. The difference between the book value and the fair value is derived from the difference between the period-end market interest rate and the stated rate of our fixed-rate senior notes. We estimated the fair value of our fixed-rate senior notes using quoted market prices of our debt in inactive markets (Level 2 inputs). The interest rate on our variable-rate debt is based on market conditions such as the Secured Overnight Financing Rate (SOFR). Because the interest rate on the variable-rate debt is based on current market conditions, we believe that the estimated fair value of the outstanding balance on our variable-rate debt approximates book value.
Concentration of Credit Risk
We are exposed to credit risk related to customer accounts receivable. In order to manage credit risk, we consider customer concentrations and current economic trends and monitor the creditworthiness of significant customers based on ongoing credit evaluations. At March 31, 2026, receivables from two customers accounted for approximately 16% and 10% of total receivables. At December 31, 2025, receivables from these two customers accounted for approximately 16% and 12% of total receivables. No other customer accounted for 10% or more of total receivables.
New and Recently Adopted Accounting Standards
In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires disclosure of specified costs and expenses in the notes to financial statements, including purchases of inventory, employee compensation, depreciation and amortization. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this ASU on the disclosures related to our consolidated financial statements.
There were no other accounting standards recently issued that had or are expected to have a material impact on our consolidated financial statements and associated disclosures.
Reclassifications
Certain amounts in prior year's consolidated financial statements have been reclassified to conform with current year's presentation, none of which were considered material.
3. Income Taxes
For the three months ended March 31, 2026 and 2025, we recorded $6.6 million and $13.8 million, respectively, of income tax expense and had an effective tax rate of 27.0% and 25.5%, respectively. For both periods, the primary reason for the difference between the federal statutory income tax rate of 21% and the effective tax rate was the effect of state taxes.
During the three months ended March 31, 2026 and 2025, cash paid for taxes, net of refunds received, was $0.6 million and $1.5 million, respectively.
4. Net Income Per Common Share
Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the combination of the weighted average number of common shares outstanding during the period and other potentially dilutive weighted average common shares. Other potentially dilutive weighted average common shares include the dilutive effect of restricted stock units and performance stock units for each period using the treasury stock method. Under the treasury stock method, the amount of compensation expense, if any, for future service that has not yet been recognized is assumed to be used to repurchase shares in the current period.
The following table sets forth the computation of basic and diluted net income per common share:
| | | | | | | | | | | | | | | |
| | Three Months Ended
March 31 | | |
| | 2026 | | 2025 | | | | |
| | (thousands, except per-share data) |
| Net income | $ | 17,842 | | | $ | 40,348 | | | | | |
| Weighted average common shares outstanding during the period (for basic calculation) | 35,909 | | | 38,017 | | | | | |
| Dilutive effect of other potential common shares | 111 | | | 198 | | | | | |
| Weighted average common shares and potential common shares (for diluted calculation) | 36,020 | | | 38,215 | | | | | |
| | | | | | | |
| Net income per common share - Basic | $ | 0.50 | | | $ | 1.06 | | | | | |
| Net income per common share - Diluted | $ | 0.50 | | | $ | 1.06 | | | | | |
The computation of the dilutive effect of other potential common shares excludes stock awards representing 0.1 million shares of common stock in the three months ended March 31, 2026 and an insignificant number of shares of common stock in the three months ended March 31, 2025. Under the treasury stock method, the inclusion of these stock awards would have been antidilutive.
5. Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price and related costs over the fair value of the net tangible and intangible assets of businesses acquired.
The carrying amount of our goodwill by segment is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Building
Materials
Distribution | |
Wood Products | | Total |
| | (thousands) |
| Balance at December 31, 2025 | | $ | 59,218 | | | $ | 126,166 | | | $ | 185,384 | |
| Measurement period adjustments (a) | | 2 | | | — | | | 2 | |
| | | | | | |
| Balance at March 31, 2026 | | $ | 59,220 | | | $ | 126,166 | | | $ | 185,386 | |
___________________________________
(a) Represents a measurement period adjustment related to the acquisition of Holden Humphrey in fourth quarter 2025. For additional information on the acquisition, see Note 6, Acquisitions, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2025 Form 10-K.
At March 31, 2026 and December 31, 2025, intangible assets represented the values assigned to trade names and trademarks and customer relationships. We maintain trademarks for our manufactured wood products, particularly EWP. Our key registered trademarks are perpetual in duration as long as we continue to timely file all post registration maintenance documents related thereto. These trademarks have indefinite lives, are not amortized, and have a carrying amount of $8.9 million. In addition, we have acquired trade names and customer relationships through acquisitions, which are amortized over their useful life. For the three months ended March 31, 2026 and 2025 we recognized $5.3 million and $5.1 million, respectively, of amortization expense for intangible assets.
Intangible assets consisted of the following:
| | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 |
| | Gross Carrying
Amount | | Accumulated
Amortization | | Net Carrying
Amount |
| | (thousands) |
| Trade names and trademarks | | $ | 27,600 | | | $ | (3,699) | | | $ | 23,901 | |
| Customer relationships | | 204,078 | | | (73,574) | | | 130,504 | |
| | $ | 231,678 | | | $ | (77,273) | | | $ | 154,405 | |
| | | | | | | | | | | | | | | | | | | | |
| | December 31, 2025 |
| | Gross Carrying
Amount | | Accumulated
Amortization | | Net Carrying
Amount |
| | (thousands) |
| Trade names and trademarks | | $ | 27,600 | | | $ | (3,399) | | | $ | 24,201 | |
| Customer relationships | | 204,078 | | | (68,614) | | | 135,464 | |
| | $ | 231,678 | | | $ | (72,013) | | | $ | 159,665 | |
6. Debt
Long-term debt consisted of the following:
| | | | | | | | | | | |
| | March 31,
2026 | | December 31,
2025 |
| | (thousands) |
| Revolving credit facility due 2030 | $ | 50,000 | | | $ | 50,000 | |
4.875% senior notes due 2030 | 400,000 | | | 400,000 | |
4% promissory note due 2031 | 2,483 | | | — | |
| Deferred financing costs | (4,335) | | | (4,595) | |
| Long-term debt | $ | 448,148 | | | $ | 445,405 | |
Credit Agreement
On April 14, 2025, we entered into a Credit Agreement (the Credit Agreement) with JPMorgan Chase Bank, N.A., as administrative agent and a lender, and the other lenders from time to time party thereto. The Credit Agreement provides for a $450 million revolving credit facility (the Revolver), which includes a $45 million swingline sub-facility and a $75 million letter of credit sub-facility. Borrowings under the Revolver may be repaid and re-borrowed from time to time at our discretion without premium or penalty. The proceeds of borrowings under the agreement are available for working capital needs and general business purposes. The Credit Agreement matures on April 12, 2030.
Interest rates under the Credit Agreement are based, at our election, on either an Alternate Base Rate, a Term SOFR Rate, or a Daily Simple SOFR Rate (each as defined in the Credit Agreement), each plus an applicable spread based on our Net Leverage Ratio (as defined in the Credit Agreement). The frequency of interest payments on borrowings under the Credit Agreement is dependent on the type of borrowing outstanding. In addition, we are required to pay an unused commitment fee on the unused portion of the lending commitments. This fee ranges from 0.20% to 0.30% per annum, dependent upon our Net Leverage Ratio.
The Credit Agreement is secured by a first priority security interest in substantially all of the assets of Boise Cascade Company and the guarantors under the Credit Agreement, except real property and certain other excluded property. The obligations of Boise Cascade Company are required to be guaranteed by all Material Domestic Subsidiaries (as defined in the Credit Agreement).
The Credit Agreement contains customary nonfinancial covenants, including but not limited to, restrictions on new indebtedness, liens, dispositions, certain investments, mergers, swap agreements, restricted payments, and restrictions on affiliate transactions. The Credit Agreement also contains a requirement that our Net Leverage Ratio shall not exceed 3.5:1 as of the last day of any fiscal quarter. The restricted payment covenant includes restrictions on our ability to pay dividends or repurchase stock. Among other carve outs from this provision is one that allows us to pay dividends or repurchase stock without any dollar limitation, so long as both before and immediately after giving effect to such payments, (i) no default exists or would result therefrom and (ii) the Net Leverage Ratio is less than or equal to 3:1.
At both March 31, 2026 and December 31, 2025, we had $50.0 million outstanding under the Revolver and $4.9 million of letters of credit outstanding. These letters of credit and borrowings, if any, reduce availability under the Revolver by an equivalent amount. Availability at March 31, 2026 was $395.1 million. During the three months ended March 31, 2026, the average interest rate on borrowings outstanding under the Revolver was approximately 4.91%.
2030 Notes
On July 27, 2020, we issued $400 million of 4.875% senior notes due July 1, 2030 (2030 Notes) through a private placement that was exempt from the registration requirements of the Securities Act. Interest on our 2030 Notes is payable semiannually in arrears on January 1 and July 1. The 2030 Notes are guaranteed by each of our existing and future direct or indirect domestic subsidiaries that is a guarantor under our Credit Agreement.
The 2030 Notes are senior unsecured obligations and rank equally with all of the existing and future senior indebtedness of Boise Cascade Company and of the guarantors, senior to all of their existing and future subordinated indebtedness, effectively subordinated to all of their present and future senior secured indebtedness (including all borrowings with respect to our Credit Agreement to the extent of the value of the assets securing such indebtedness), and structurally subordinated to the indebtedness of any subsidiaries that do not guarantee the 2030 Notes.
The terms of the indenture governing the 2030 Notes, among other things, limit the ability of Boise Cascade and our restricted subsidiaries to: incur additional debt; declare or pay dividends; redeem stock or make other distributions to stockholders; make investments; create liens on assets; consolidate, merge or transfer substantially all of their assets; enter into transactions with affiliates; and sell or transfer certain assets. The indenture governing the 2030 Notes permits us to pay dividends only if at the time of payment (i) no default has occurred or is continuing (or would result from such payment) under the indenture, and (ii) our consolidated leverage ratio is no greater than 3.5:1, or (iii) the dividend, together with other dividends since the issue date, would not exceed our "builder" basket under the indenture. In addition, the indenture includes certain specific baskets for the payment of dividends.
The indenture governing the 2030 Notes provides for customary events of default and remedies.
Cash Paid for Interest
For the three months ended March 31, 2026 and 2025, cash payments for interest were $10.0 million and $9.2 million, respectively.
7. Leases
Lease Costs
The components of lease expense were as follows:
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31 | | |
| 2026 | | 2025 | | | | |
| (thousands) |
| Operating lease cost | $ | 3,669 | | | $ | 3,416 | | | | | |
| Finance lease cost | | | | | | | |
| Amortization of right-of-use assets | 439 | | | 600 | | | | | |
| Interest on lease liabilities | 448 | | | 503 | | | | | |
| Variable lease cost | 1,344 | | | 1,492 | | | | | |
| Short-term lease cost | 1,915 | | | 1,693 | | | | | |
| Sublease income | (7) | | | (53) | | | | | |
| Total lease cost | $ | 7,808 | | | $ | 7,651 | | | | | |
Other Information
Supplemental cash flow information related to leases was as follows:
| | | | | | | | | | | | |
| Three Months Ended
March 31 | |
| 2026 | | 2025 | |
| (thousands) | |
| Cash paid for amounts included in the measurement of lease liabilities | | | | |
| Operating cash flows from operating leases | $ | 3,666 | | | $ | 3,365 | | |
| Operating cash flows from finance leases | 447 | | | 502 | | |
| Financing cash flows from finance leases | 316 | | | 502 | | |
| Right-of-use assets obtained in exchange for lease obligations | | | | |
| Operating leases | 2,954 | | | 318 | | |
| Finance leases | 30,386 | | | — | | |
Other information related to leases was as follows:
| | | | | | | | | | | | | | | |
| |
| March 31, 2026 | | December 31, 2025 | | | | |
| | | | | | | |
| Weighted-average remaining lease term (years) | | | | | | | |
| Operating leases | 6 | | 7 | | | | |
| Finance leases | 14 | | 12 | | | | |
| Weighted-average discount rate | | | | | | | |
| Operating leases | 5.8 | % | | 5.9 | % | | | | |
| Finance leases | 6.9 | % | | 8.6 | % | | | | |
As of March 31, 2026, our minimum lease payment requirements for noncancelable operating and finance leases are as follows:
| | | | | | | | | | | | | | |
| | Operating Leases | | Finance Leases |
| | (thousands) |
| Remainder of 2026 | | $ | 10,031 | | | $ | 3,789 | |
| 2027 | | 13,121 | | | 5,141 | |
| 2028 | | 10,251 | | | 5,038 | |
| 2029 | | 9,330 | | | 5,066 | |
| 2030 | | 7,327 | | | 4,904 | |
| Thereafter | | 19,324 | | | 49,119 | |
| Total future minimum lease payments | | 69,384 | | | 73,057 | |
| Less: interest | | (12,350) | | | (26,279) | |
| Total lease obligations | | 57,034 | | | 46,778 | |
| Less: current obligations | | (10,432) | | | (1,950) | |
| Long-term lease obligations | | $ | 46,602 | | | $ | 44,828 | |
As of March 31, 2026, undiscounted future lease payments for an additional lease that has not yet commenced are approximately $26 million. This lease is expected to commence in the second half of 2026 with a lease term of approximately 16 years.
8. Stock-Based Compensation
During the three months ended March 31, 2026 and 2025, we granted two types of stock-based awards: performance stock units (PSUs) and restricted stock units (RSUs).
PSU and RSU Awards
During the three months ended March 31, 2026, we granted 91,368 PSUs to our officers and other employees, subject to performance and service conditions. For the officers, the PSUs granted are subject to a three-year performance period. The number of shares actually awarded will range from 0% to 200% of the target amount. Achievement is measured in annual sub-periods, based on Boise Cascade's return on invested capital (ROIC) for 2026, 2027, and 2028. The average achievement for the three years included in the performance period will determine the number of earned PSUs, as approved by our compensation committee in accordance with the related grant agreement. We define ROIC as net operating profit after taxes (NOPAT) divided by average invested capital (based on a rolling thirteen-month average). We define NOPAT as net income plus after-tax financing expense. Invested capital is defined as total assets plus capitalized lease expense, less cash, cash equivalents, and current liabilities, excluding short-term debt. For the other employees, the PSUs granted are subject to a one-year performance period. The number of shares actually awarded will range from 0% to 200% of the target amount, depending upon Boise Cascade’s 2026 EBITDA, defined as income before interest (interest expense and interest income), income taxes, and depreciation and amortization, as approved by executive management, determined in accordance with the related grant agreement. During the three months ended March 31, 2025, we granted 83,616 PSUs to our officers and other employees, subject to performance and service conditions. For both periods, the PSUs granted to officers generally vest in a single installment three years from the date of grant, while the PSUs granted to other employees vest in three equal tranches each year after the grant date.
During the three months ended March 31, 2026 and 2025, we granted an aggregate of 111,613 and 98,327 RSUs, respectively, to our officers, other employees, and nonemployee directors with only service conditions. The RSUs granted to officers and other employees vest in three equal tranches each year after the grant date. The RSUs granted to nonemployee directors vest in a single installment after a one year period.
We based the fair value of PSU and RSU awards on the closing market price of our common stock on the grant date. During the three months ended March 31, 2026 and 2025, the total fair value of PSUs and RSUs vested was $17.2 million and $15.7 million, respectively.
The following summarizes the activity of our PSUs and RSUs awarded under our incentive plan for the three months ended March 31, 2026: | | | | | | | | | | | | | | | | | | | | | | | |
| PSUs | | RSUs |
| Number of shares | | Weighted Average Grant-Date Fair Value | | Number of shares | | Weighted Average Grant-Date Fair Value |
| Outstanding, December 31, 2025 | 242,320 | | | $ | 93.44 | | | 152,293 | | | $ | 105.92 | |
| Granted | 91,368 | | | 82.74 | | | 111,613 | | | 82.74 | |
| Performance condition adjustment (a) | (5,357) | | | 103.66 | | | — | | | — | |
| Vested | (124,740) | | | 72.13 | | | (83,311) | | | 101.18 | |
| | | | | | | |
| Outstanding, March 31, 2026 | 203,591 | | | $ | 101.42 | | | 180,595 | | | $ | 93.78 | |
_______________________________
(a) Represents total PSUs forfeited during the three months ended March 31, 2026, related to below-target achievement of the 2025 performance condition on awards granted to other employees in 2025. During the 2025 performance period, other employees earned 63% of the target based on Boise Cascade's 2025 EBITDA, determined by executive management, in accordance with the related grant agreement.
Compensation Expense
We record compensation expense over the awards' vesting period and account for share-based award forfeitures as they occur, rather than making estimates of future forfeitures. Any shares not vested are forfeited. We recognize compensation expense for stock awards with performance and service conditions over the requisite service period based on the most probable number of shares expected to vest. We recognize compensation expense for stock awards with only service conditions on a straight-line basis over the requisite service period. Most of our stock-based compensation expense was recorded in "General and administrative expenses" in our Consolidated Statements of Operations. Total stock-based compensation recognized from PSUs and RSUs, net of forfeitures, was as follows:
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31 | | |
| 2026 | | 2025 | | | | |
| (thousands) |
| PSUs | $ | 1,266 | | | $ | 1,832 | | | | | |
| RSUs | 2,192 | | | 1,925 | | | | | |
| | | | | | | |
| Total | $ | 3,458 | | | $ | 3,757 | | | | | |
The related tax benefit for the three months ended March 31, 2026 and 2025, was $0.9 million and $1.0 million, respectively. As of March 31, 2026, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $25.2 million. This expense is expected to be recognized over a weighted-average period of 2.2 years.
9. Stockholders' Equity
Dividends
On November 14, 2017, we announced that our board of directors approved a dividend policy to pay quarterly cash dividends to holders of our common stock. For more information regarding our dividend declarations and payments made during each of the three months ended March 31, 2026 and 2025, see "Common stock dividends" on our Consolidated Statements of Stockholders' Equity.
On April 30, 2026, our board of directors declared a quarterly dividend of $0.22 per share on our common stock, payable on June 17, 2026, to stockholders of record on June 1, 2026. For a description of the restrictions in our revolving credit facility and the indenture governing our senior notes on our ability to pay dividends, see Note 6, Debt.
Future dividend declarations, including amount per share, record date and payment date, will be made at the discretion of our board of directors and will depend upon, among other things, legal capital requirements and surplus, our future operations and earnings, general financial condition, material cash requirements, restrictions imposed by our revolving credit facility and the indenture governing our senior notes, applicable laws, and other factors that our board of directors may deem relevant.
Stock Repurchase
On October 30, 2025, our board of directors approved a new share repurchase authorization of $300.0 million of our outstanding common stock, excluding applicable fees and taxes. Share repurchases may be made on an opportunistic basis, through open market transactions, privately negotiated transactions, or by other means in accordance with applicable federal securities laws. We are not obligated to purchase any shares and there is no set date that the share repurchase program will expire. Our board of directors, at its discretion, may increase or decrease the amount authorized or terminate the share repurchase program at any time.
During third quarter 2025, our board of directors approved a resolution to retire all outstanding treasury shares previously purchased, as well as a policy to retire all future shares immediately upon repurchase. In accordance with the Company’s policy, the excess cost over par value of retired treasury shares is allocated to retained earnings. Repurchased shares are subject to a 1% excise tax, which is also allocated to retained earnings.
During the three months ended March 31, 2026, we repurchased and retired 830,751 shares at a cost of $65.5 million, or an average of $78.86 per share, exclusive of excise tax. The shares were purchased with cash on hand and were retired in accordance with our board-approved policy. As of March 31, 2026, there was $173.1 million of our outstanding common stock that may yet be purchased under the share repurchase program. During the three months ended March 31, 2025, we repurchased 482,700 shares with cash on hand at a cost of $53.9 million, or an average of $111.63 per share, exclusive of excise tax.
In April 2026, we repurchased and retired 312,894 shares at a cost of approximately $25 million, or an average of $79.91 per share, exclusive of excise tax. Subsequent to these share repurchases, there was approximately $148 million of our outstanding common stock that may yet be purchased under the share repurchase program.
10. Transactions With Related Party
Louisiana Timber Procurement Company, L.L.C. (LTP) is an unconsolidated variable-interest entity that is 50% owned by us and 50% owned by Packaging Corporation of America (PCA). LTP procures sawtimber, pulpwood, residual chips, and other residual wood fiber to meet the wood and fiber requirements of us and PCA in Louisiana. We are not the primary beneficiary of LTP as we do not have power to direct the activities that most significantly affect the economic performance of LTP. Accordingly, we do not consolidate LTP's results in our financial statements.
Sales
Related-party sales to LTP from our Wood Products segment in our Consolidated Statements of Operations were $2.1 million and $1.6 million, respectively, during the three months ended March 31, 2026 and 2025. These sales are recorded in "Sales" in our Consolidated Statements of Operations.
Costs and Expenses
Related-party wood fiber purchases from LTP were $18.0 million and $14.8 million, respectively, during the three months ended March 31, 2026 and 2025. These costs are recorded in "Materials, labor, and other operating expenses (excluding depreciation)" in our Consolidated Statements of Operations.
11. Segment Information
We operate our business using two reportable segments: BMD and Wood Products. There are no differences in our basis of measurement of segment profit or loss from those disclosed in Note 15, Segment Information, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2025 Form 10-K.
BMD and Wood Products segment sales to external customers, including related parties, by product line, are as follows:
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31 | | |
| 2026 | | 2025 | | | | |
| (millions) |
| Building Materials Distribution | | | | | | | |
| General line | $ | 625.0 | | | $ | 599.7 | | | | | |
| Commodity | 492.8 | | | 516.9 | | | | | |
| Engineered wood products | 271.1 | | | 290.5 | | | | | |
| 1,388.9 | | | 1,407.1 | | | | | |
| | | | | | | |
| Wood Products (a) | | | | | | | |
| LVL (b) | 10.4 | | | 16.7 | | | | | |
| I-joists (b) | 4.8 | | | 11.2 | | | | | |
| Other engineered wood products (b) | 2.1 | | | 6.8 | | | | | |
| Plywood and veneer | 59.2 | | | 59.8 | | | | | |
| Lumber | 12.2 | | | 12.7 | | | | | |
| Byproducts | 15.4 | | | 15.7 | | | | | |
| Other | 5.6 | | | 6.4 | | | | | |
| 109.7 | | | 129.4 | | | | | |
| $ | 1,498.6 | | | $ | 1,536.5 | | | | | |
___________________________________
(a) Amounts represent sales to external customers. Sales are calculated after intersegment sales eliminations to our BMD segment.
(b) Sales of EWP to external customers are net of the cost of all EWP rebates and sales allowances provided at various stages of the supply chain (including distributors, dealers, and homebuilders). For the three months ended March 31, 2026 and 2025, approximately 77% and 73%, respectively, of Wood Products' EWP sales volumes were to our BMD segment.
An analysis of our operations by segment is as follows:
| | | | | | | | | | | | | | | |
| | Three Months Ended
March 31 | | |
| | 2026 | | 2025 | | | | |
| | (thousands) |
| Building Materials Distribution | | | | | | | |
| Sales | $ | 1,388,948 | | | $ | 1,407,116 | | | | | |
| | | | | | | |
| Less: | | | | | | | |
| Materials, labor, and other operating expenses (excluding depreciation) (a) | 1,189,236 | | | 1,200,940 | | | | | |
| Selling and distribution expenses | 141,274 | | | 133,099 | | | | | |
| Other segment items (b) | 10,213 | | | 10,298 | | | | | |
| Depreciation and amortization | 15,283 | | | 14,362 | | | | | |
| 1,356,006 | | | 1,358,699 | | | | | |
| | | | | | | |
| Segment income from operations | $ | 32,942 | | | $ | 48,417 | | | | | |
| | | | | | | |
| Wood Products | | | | | | | |
| Sales | $ | 398,204 | | | $ | 415,845 | | | | | |
| | | | | | | |
| Less: | | | | | | | |
| Materials, labor, and other operating expenses (excluding depreciation) (a) | 352,985 | | | 362,246 | | | | | |
| Other segment items (b) | 13,262 | | | 13,404 | | | | | |
| Depreciation and amortization | 23,465 | | | 22,486 | | | | | |
| 389,712 | | | 398,136 | | | | | |
| | | | | | | |
| Segment income from operations | $ | 8,492 | | | $ | 17,709 | | | | | |
| | | | | | | |
| Reconciliation of sales | | | | | | | |
| Building Materials Distribution | $ | 1,388,948 | | | $ | 1,407,116 | | | | | |
| Wood Products | 398,204 | | | 415,845 | | | | | |
| Intersegment eliminations (c) | (288,538) | | | (286,467) | | | | | |
| Total net sales | $ | 1,498,614 | | | $ | 1,536,494 | | | | | |
| | | | | | | |
| Reconciliation of income | | | | | | | |
| Building Materials Distribution | $ | 32,942 | | | $ | 48,417 | | | | | |
| Wood Products | 8,492 | | | 17,709 | | | | | |
| Unallocated corporate costs (d) | (13,649) | | | (11,607) | | | | | |
| Income from operations | $ | 27,785 | | | $ | 54,519 | | | | | |
| Interest expense | (6,019) | | | (5,312) | | | | | |
| Interest income | 2,937 | | | 5,510 | | | | | |
| Other unallocated items (e) | (271) | | | (523) | | | | | |
| Income before income taxes | $ | 24,432 | | | $ | 54,194 | | | | | |
| | | | | | | |
___________________________________
(a) Substantially all costs included in "Materials, labor, and other operating expenses (excluding depreciation)" for our BMD segment are for inventory purchased for resale. "Materials, labor, and other operating expenses (excluding depreciation)" for our Wood Products segment are the costs associated with Wood Products' manufacturing processes, including wood fiber, labor, glues and resins, energy, operating supplies, maintenance materials, freight, and other manufacturing costs.
(b) Other segment items for our BMD segment includes general and administrative expenses and other income (expense). Other segment items for our Wood Products segment includes selling and distribution expenses, general and administrative expenses, and other income (expense).
(c) Primarily represents intersegment sales from our Wood Products segment to our BMD segment.
(d) Unallocated corporate costs include corporate support staff services, and related assets and liabilities. Support services include, but are not limited to, information technology, human resources, finance, accounting, insurance and legal functions. For the three months ended March 31, 2026, unallocated corporate costs includes $1.8 million of estimated insurance losses related to a fire at our Florien plywood facility.
(e) Other unallocated items include foreign exchange gains and losses, pension expense (excluding service costs) and the change in fair value of interest rate swaps.
| | | | | | | | | | | | | | | |
| | March 31,
2026 | | December 31,
2025 | | | | |
| | (thousands) |
| Assets | | | | | | | |
| Building Materials Distribution | $ | 1,801,868 | | | $ | 1,580,239 | | | | | |
| Wood Products | 1,187,743 | | | 1,183,351 | | | | | |
| Corporate | 352,013 | | | 478,353 | | | | | |
| Total assets | $ | 3,341,624 | | | $ | 3,241,943 | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | |
| | Three Months Ended
March 31 | | |
| | 2026 | | 2025 | | | | |
| | (thousands) |
| Capital expenditures | | | | | | | |
| Building Materials Distribution (a) | $ | 22,911 | | | $ | 22,431 | | | | | |
| Wood Products | 16,663 | | | 30,689 | | | | | |
| Corporate | 250 | | | 85 | | | | | |
| Total capital expenditures | $ | 39,824 | | | $ | 53,205 | | | | | |
| | | | | | | |
___________________________________
(a) 2026 capital expenditures for BMD is reported net of a $2.5 million promissory note, which partially funded the purchase of our previously leased distribution facility in Boise, Idaho.
12. Commitments, Legal Proceedings and Contingencies, and Guarantees
Commitments
We are a party to a number of long-term log supply agreements that are discussed in Note 16, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2025 Form 10-K. In addition, we have purchase obligations for goods and services, capital expenditures, and raw materials entered into in the normal course of business. As of March 31, 2026, there have been no material changes to the above commitments disclosed in the 2025 Form 10-K.
Legal Proceedings and Contingencies
We are a party to legal proceedings that arise in the ordinary course of our business, including commercial liability claims, premises claims, environmental claims, employment-related claims, and governmental investigations and audits, among others. In accordance with accounting guidance, the Company establishes an accrual for legal proceedings if and when those matters present loss contingencies that are both probable and reasonably estimable. There may be actual losses in excess of amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss (taking into account, where applicable, indemnification arrangements concerning suppliers and insurers) and the accrued amount, if any, thereof, and adjusts the amount as appropriate. If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual, but monitors for developments that make the contingency both probable and
reasonably estimable. In each case, there is a reasonable possibility that a loss may be incurred, including a loss in excess of the applicable accrual. For matters where no accrual has been recorded, the possible loss or range of loss (including any loss in excess of the accrual) cannot, in the Company's view, be reasonably estimated because, among other things: the remedies or penalties sought are indeterminate or unspecified; the legal and/or factual theories are not well developed; and/or the matters involve complex or novel legal theories or a large number of parties. The Company has recorded an accrual with respect to a matter described below, in addition to other immaterial accruals for matters not described below.
On May 22, 2024, our distribution facility in Pompano, Florida, was put on notice of an investigation by the Department of Homeland Security’s Immigration and Customs Enforcement. The requested information, primarily documentation, related to the importation of certain third-party produced plywood products in accordance with the Lacey Act. On April 27, 2026, the Company and the Department of Justice ("DOJ") entered into a plea agreement under which the Company pled guilty to one felony count under the Lacey Act and agreed, among other things, to pay a fine of approximately $6.4 million and serve five years' probation. The plea agreement was accepted by the U.S. District Court for the Southern District of Florida and the matter concluded on the same day. The fine was previously recorded in other current liabilities and other (income) and expense, net, during fourth quarter 2025.
The Company does not believe that any pending claim, proceeding or litigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows; it is possible that an unfavorable outcome of some or all of the matters, however unlikely, could result in a charge that might be material to the results of an individual fiscal quarter or year.
Guarantees
We provide guarantees, indemnifications, and assurances to others. Note 16, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2025 Form 10-K describes the nature of our guarantees, including the approximate terms of the guarantees, how the guarantees arose, the events or circumstances that would require us to perform under the guarantees, and the maximum potential undiscounted amounts of future payments we could be required to make. As of March 31, 2026, there have been no material changes to the guarantees disclosed in the 2025 Form 10-K.
