BOISE CASCADE Co 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Understanding Our Financial Information This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and related notes in "Item 1. Financial Statements" of this Form 10-Q, as well as our 2024 Form 10-K. The following discussion includes statements regarding our expectations with respect to our future performance, liquidity, and capital resources. Such statements, along with any other non-historical statements in the discussion, are forward-looking. These forward-looking statements include, without limitation, any statement that may predict, indicate, or imply future results, performance, or achievements and may contain the words "may," "will," "expect," "believe," "should," "plan," "anticipate," and other similar expressions. All of these forward-looking statements are based on estimates and assumptions made by our management that, although believed by us to be reasonable, are inherently uncertain. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in "Item 1A. Risk Factors" in our 2024 Form 10-K, as well as those factors listed in other documents we file with the Securities and Exchange Commission (the SEC). We do not assume an obligation to update any forward-looking statement. Our future actual results may differ materially from those contained in or implied by any of the forward-looking statements in this Form 10-Q. Background 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. Boise Cascade is a large, integrated wood products manufacturer and building materials distributor. We have two reportable segments: (i) Wood Products, which primarily manufactures engineered wood products (EWP) and plywood; and (ii) Building Materials Distribution (BMD), which is a wholesale distributor of building materials. Our 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. For more information, see Note 11, Segment Information, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Item 1. Financial Statements" of this Form 10-Q. 25 Table of Contents Executive Overview We recorded income from operations of $32.3 million during the three months ended September 30, 2025, compared with income from operations of $117.4 million during the three months ended September 30, 2024. For the three months ended September 30, 2025, Wood Products' segment loss was $12.1 million compared to segment income of $53.9 million for the three months ended September 30, 2024. The decrease in income was due to lower EWP and plywood sales prices and sales volumes, as well as higher per-unit conversion costs. In our BMD segment, income decreased $20.5 million to $54.3 million for the three months ended September 30, 2025, from $74.8 million for the three months ended September 30, 2024, driven by a gross margin decrease of $10.6 million, resulting primarily from decreased margins on commodity and EWP products, offset partially by increased margins on general line products. In addition, selling and distribution expenses and depreciation and amortization expense increased $7.8 million and $2.6 million, respectively. These changes are discussed further in "Our Operating Results" below. We ended third quarter 2025 with $511.8 million of cash and cash equivalents and $395.2 million of undrawn committed bank line availability, for total available liquidity of $907.0 million. We had $450.0 million of outstanding debt at September 30, 2025. We used $201.5 million of cash during the nine months ended September 30, 2025, as cash provided by operations was offset by capital spending, treasury stock purchases, and dividends paid on our common stock. A further description of our cash sources and uses for the nine-month comparative periods are discussed in "Liquidity and Capital Resources" below. Demand for the products we manufacture, as well as the products we purchase and distribute, is closely tied to new residential construction, residential repair-and-remodeling activity, and light commercial construction. Residential construction, particularly new single-family construction, remains a key driver of demand for the products we manufacture and distribute. During 2025, the housing market has been shaped by policy uncertainty, low consumer confidence, elevated interest rates, and affordability challenges for prospective homebuyers. Early industry projections for 2026 are consistent with 2025 housing start levels. Demand expectations are characterized by a cautious market in the first half of the year, with gradual improvement expected later in the year. This improvement is expected to be driven by the continuation of interest rate cuts and normalized homebuilder inventory levels. Near term demand will continue to be influenced by factors such as mortgage rates, home affordability, home equity levels, home sizes, new and existing home inventory levels, unemployment rates, and consumer confidence. However, long-term demand drivers for residential construction, including generational tailwinds and an undersupply of housing units, remain strong, while elevated levels of homeowner equity and an aging U.S. housing stock support robust repair-and-remodel spending and reinforce the industry’s solid fundamentals. As a manufacturer of plywood, a commodity product, we remain subject to fluctuations in product pricing and input costs. Our distribution business, which purchases and resells a diverse range of products, experiences opportunities for increased sales and margins during periods of rising prices, while periods of declining prices may present challenges. Future product pricing, particularly for commodity products, is expected to remain dynamic, influenced by economic conditions, industry operating rates, supply disruptions, duties, tariffs, transportation constraints, inventory levels, and seasonal demand patterns. With seasonally slower activity expected in the fourth quarter, we anticipate taking capital project and maintenance-related downtime at certain of our manufacturing facilities, and may also take periodic market-related downtime across our manufacturing system in order to align production rates and inventory stocking positions with end market demand signals. Factors That Affect Our Operating Results and Trends Our results of operations and financial performance are influenced by a variety of factors, including the following: • the commodity nature of a portion of our products and their price movements, which are driven largely by general economic conditions, industry capacity and operating rates, industry cycles that affect supply and demand, and net import and export activity; • the highly competitive nature of our industry; • declines in demand for our products due to competing technologies or materials, as well as changes in building code provisions; • disruptions to information systems used to process and store customer, employee, and vendor information, as well as the technology that manages our operations and other business processes; • material disruptions and/or major equipment failure at our manufacturing facilities; 26 Table of Contents • declining demand for residual byproducts, particularly wood chips generated in our manufacturing operations; • labor disruptions, shortages of skilled and technical labor, or increased labor costs; • the need to successfully formulate and implement succession plans for key members of our management team; • product shortages, loss of key suppliers, and our dependence on third-party suppliers and manufacturers; • the cost and availability of third-party transportation services used to deliver the goods we manufacture and distribute, as well as our raw materials; • cost and availability of raw materials, including wood fiber and glues and resins; • our ability to execute our organic growth and acquisition strategies efficiently and effectively; • failures or delays with new or existing technology systems and software platforms; • our ability to successfully pursue our long-term growth strategy related to innovation and digital technology; • concentration of our sales among a relatively small group of customers, as well as the financial condition and creditworthiness of our customers; • impairment of our long-lived assets, goodwill, and/or intangible assets; • substantial ongoing capital investment costs, including those associated with organic growth and acquisitions, and the difficulty in offsetting fixed costs related to those investments; • our indebtedness, including the possibility that we may not generate sufficient cash flows from operations or that future borrowings may not be available in amounts sufficient to fulfill our debt obligations and fund other liquidity needs; • restrictive covenants contained in our debt agreements; • changes in foreign trade policy, including the imposition of tariffs; • compliance with data privacy and security laws and regulations; • the impacts of climate change and related legislative and regulatory responses intended to reduce climate change; • cost of compliance with government regulations, in particular, environmental regulations; • exposure to product liability, product warranty, casualty, construction defect, and other claims; • fluctuations in the market for our equity; and • the other factors described in "Item 1A. Risk Factors" in our 2024 Form 10-K. 27 Table of Contents Our Operating Results The following tables set forth our operating results in dollars and as a percentage of sales for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 (millions) Sales $ 1,667.8 $ 1,713.7 $ 4,944.4 $ 5,156.8 Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 1,404.3 1,375.7 4,122.0 4,123.8 Depreciation and amortization 42.4 36.9 116.9 107.1 Selling and distribution expenses 165.1 157.5 470.5 451.4 General and administrative expenses 25.8 26.2 77.2 77.2 Other (income) expense, net (2.0) 0.1 (9.6) (0.1) 1,635.5 1,596.4 4,777.0 4,759.5 Income from operations $ 32.3 $ 117.4 $ 167.4 $ 397.3 (percentage of sales) Sales 100.0 % 100.0 % 100.0 % 100.0 % Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 84.2 % 80.3 % 83.4 % 80.0 % Depreciation and amortization 2.5 2.2 2.4 2.1 Selling and distribution expenses 9.9 9.2 9.5 8.8 General and administrative expenses 1.5 1.5 1.6 1.5 Other (income) expense, net (0.1) — (0.2) — 98.1 % 93.2 % 96.6 % 92.3 % Income from operations 1.9 % 6.8 % 3.4 % 7.7 % 28 Table of Contents Sales Volumes and Prices Set forth below are historical U.S. housing starts data, segment sales volumes and average net selling prices for the principal products sold by our Wood Products segment, and sales mix and gross margin information for our BMD segment for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 (thousands) U.S. Housing Starts (a) Single-family 165.9 259.8 658.6 782.1 Multi-family 77.0 93.4 276.6 262.7 242.9 353.2 935.2 1,044.8 (thousands) Segment Sales Wood Products $ 396,401 $ 453,896 $ 1,259,481 $ 1,412,647 Building Materials Distribution 1,556,150 1,567,466 4,578,181 4,727,708 Intersegment eliminations (284,745) (307,638) (893,248) (983,541) Total sales $ 1,667,806 $ 1,713,724 $ 4,944,414 $ 5,156,814 Wood Products (millions) Sales Volumes Laminated veneer lumber (LVL) (cubic feet) 4.6 5.0 14.7 14.8 I-joists (equivalent lineal feet) 53 59 170 181 Plywood (sq. ft.) (3/8" basis) 387 391 1,106 1,146 Wood Products (dollars per unit) Average Net Selling Prices Laminated veneer lumber (LVL) (cubic foot) $ 24.03 $ 27.62 $ 25.12 $ 28.15 I-joists (1,000 equivalent lineal feet) 1,684 1,921 1,775 1,966 Plywood (1,000 sq. ft.) (3/8" basis) 325 333 335 357 (percentage of BMD sales) Building Materials Distribution Product Line Sales Commodity 34.2 % 34.9 % 35.0 % 35.5 % General line 46.7 % 43.8 % 45.0 % 42.4 % Engineered wood products 19.1 % 21.3 % 20.0 % 22.1 % Gross margin percentage (b) 15.1 % 15.7 % 15.1 % 15.2 % _______________________________________ 29 Table of Contents (a) U.S. housing starts for the three and nine months ended September 30, 2025 have yet to be published. Therefore, the data presented is for the two and eight months ended August 31, 2025. The three and nine months ended September 30, 2024 represent actual U.S. housing starts as reported by the U.S. Census Bureau. For the two months ended August 31, 2024 single-family, multi-family, and total U.S. housing starts (in thousands) were approximately 170.4, 66.7, and 237.1, respectively. For the eight months ended August 31, 2024 single-family, multi-family, and total U.S. housing starts (in thousands) were 692.6, 236.1, and 928.7, respectively. (b) We define gross margin as "Sales" less "Materials, labor, and other operating expenses (excluding depreciation)." Substantially all costs included in "Materials, labor, and other operating expenses (excluding depreciation)" for our BMD segment are for inventory purchased for resale. Gross margin percentage is gross margin as a percentage of segment sales. Sales For the three months ended September 30, 2025, total sales decreased $45.9 million, or 3%, to $1,667.8 million from $1,713.7 million during the three months ended September 30, 2024. For the nine months ended September 30, 2025, total sales decreased $212.4 million, or 4%, to $4,944.4 million from $5,156.8 million for the same period in the prior year. As described below, the decrease in sales in both periods was driven by the changes in sales prices and volumes for the products we manufacture and distribute, with single-family residential construction activity being the key demand driver of our sales. When comparing July 2025 and August 2025 housing starts to the same periods in 2024, total U.S. housing starts increased 2%, while single-family housing starts decreased 3%. On a year-to-date basis through August 2025, total U.S. housing starts increased 1%, while single-family housing starts decreased 5%, compared to the same period in 2024. Average composite panel prices for the three and nine months ended September 30, 2025 were 14% and 15% lower, respectively, than in the same periods in the prior year, as reflected by Random Lengths composite panel pricing. Average composite lumber prices for the three and nine months ended September 30, 2025 were 7% and 13% higher, respectively, than in the same periods in the prior year, as reflected by Random Lengths composite lumber pricing. Wood Products. Sales, including sales to our BMD segment, decreased $57.5 million, or 13%, to $396.4 million for the three months ended September 30, 2025, from $453.9 million for the three months ended September 30, 2024. The decrease in sales was driven by lower sales prices for LVL and I-joists (collectively referred to as EWP) of 13% and 12%, respectively, resulting in decreased sales of $16.5 million and $12.6 million, respectively. Additionally, sales volumes for I-joists and LVL decreased by 10% and 7%, respectively, resulting in decreased sales of $10.9 million and $9.4 million, respectively. In addition, lower plywood sales prices and sales volumes contributed $4.5 million to the sales decrease during the period. For the nine months ended September 30, 2025, sales, including sales to our BMD segment, decreased $153.2 million, or 11%, to $1,259.5 million from $1,412.6 million for the same period in the prior year. The decrease in sales was driven by lower sales prices for LVL and I-joists of 11% and 10%, respectively, resulting in decreased sales of $44.5 million and $32.6 million, respectively. Additionally, sales volumes for I-joists and LVL decreased 6% and 1%, respectively, resulting in decreased sales of $21.3 million and $3.3 million, respectively. Plywood sales prices and sales volumes decreased 6% and 3%, respectively, resulting in decreased sales of $23.9 million and $14.3 million, respectively. Plywood sales volumes were impacted by planned downtime to complete projects at our Oakdale plywood mill. For both periods described above, EWP sales volumes were influenced by multiple factors, including the level of housing starts, competition from other wood-based products, and concrete floor applications that limit wood floor opportunity for I-joists. Building Materials Distribution. Sales decreased $11.3 million, or 1%, to $1,556.2 million for the three months ended September 30, 2025, from $1,567.5 million for the three months ended September 30, 2024. Compared with the same quarter in the prior year, the overall decrease in sales was driven by a sales price decrease of 1%, as sales volumes were flat. By product line, commodity sales decreased 3%, or $16.2 million; general line product sales increased 6%, or $41.7 million; and EWP sales (substantially all of which are sourced through our Wood Products segment) decreased 11%, or $36.8 million. During the nine months ended September 30, 2025, sales decreased $149.5 million, or 3%, to $4,578.2 million from $4,727.7 million for the same period in the prior year. The overall decrease in sales was driven by sales price and sales volume decreases of 2% and 1%, respectively. By product line, commodity sales decreased 5%, or $79.3 million; general line product sales increased 3%, or $55.7 million; and sales of EWP decreased 12%, or $125.9 million. Costs and Expenses Materials, labor, and other operating expenses (excluding depreciation) increased $28.6 million, or 2%, to $1,404.3 million for the three months ended September 30, 2025, compared with $1,375.7 million during the same period in the prior year. In our Wood Products segment, materials, labor, and other operating expenses increased due to higher labor and other manufacturing costs. These increases were offset partially by decreased sales volumes for EWP, as well as lower costs of OSB 30 Table of Contents (used in the manufacture of I-joists) and decreased purchases of externally produced veneer compared with third quarter 2024. Materials, labor, and other operating expenses as a percentage of sales (MLO rate) in our Wood Products segment increased by 1,330 basis points, primarily as the result of lower EWP sales prices and volumes, which resulted in decreased leveraging of manufacturing costs. In BMD, the decrease in materials, labor, and other operating expenses was driven by lower purchased materials costs as a result of a decline in sales compared with third quarter 2024. The BMD segment MLO rate increased 60 basis points, driven by lower margin percentages on commodity and EWP products. For the nine months ended September 30, 2025, materials, labor, and other operating expenses (excluding depreciation) decreased $1.9 million, or less than 1%, to $4,122.0 million, compared with $4,123.8 million in the same period in the prior year. In our Wood Products segment, materials, labor, and other operating expenses increased due to higher labor and other manufacturing costs, as well as increased purchases of externally produced veneer for our Alexandria EWP mill as a result of downtime during the first half of 2025 to complete the modernization projects at our Oakdale veneer and plywood mill. These increases were offset partially by decreased sales volumes of I-joists and plywood, as well as lower costs of OSB compared with the same period in the prior year. The MLO rate in our Wood Products segment increased by 1,190 basis points, due primarily to lower sales prices and sales volumes for both EWP and plywood, which resulted in decreased leveraging of manufacturing costs. In BMD, the decrease in materials, labor, and other operating expenses was driven by lower purchased materials costs as a result of a decline in sales, as well as increased vendor rebates and allowances, compared with the first nine months of 2024. The BMD segment MLO rate increased 10 basis points, primarily due to lower margin percentages on our commodity sales, offset partially by higher margins on our general line sales compared with the first nine months of 2024. Depreciation and amortization expense increased $5.5 million, or 15%, to $42.4 million for the three months ended September 30, 2025, compared with $36.9 million during the same period in the prior year. For the nine months ended September 30, 2025, these expenses increased $9.8 million, or 9%, to $116.9 million, compared with $107.1 million in the same period in the prior year. The increase in both periods was primarily due to purchases of property and equipment, including the recent investments at our Oakdale veneer and plywood mill. For the nine months ended September 30, 2025, the increase was offset partially by $2.2 million of accelerated depreciation recorded in first quarter 2024 for the indefinite curtailment of lumber production at our Chapman, Alabama facility. Selling and distribution expenses increased $7.6 million, or 5%, to $165.1 million for the three months ended September 30, 2025, compared with $157.5 million during the same period in the prior year. The increase was due to higher occupancy costs, shipping and handling, professional fees and services, and information technology related costs of $6.0 million. Additionally, employee-related expenses increased $3.6 million, offset partially by a decrease in incentive compensation expense of $3.0 million. For the nine months ended September 30, 2025, selling and distribution expenses increased $19.1 million, or 4%, to $470.5 million, compared with $451.4 million during the same period in 2024. The increase was primarily a result of higher professional fees and services, shipping and handling, occupancy costs, and information technology related costs of $9.2 million. In addition, employee-related expenses increased $13.6 million, offset partially by lower incentive compensation expense of $6.3 million. General and administrative expenses decreased $0.4 million, or 2%, to $25.8 million for the three months ended September 30, 2025, compared with $26.2 million for the same period in the prior year. For both the nine months ended September 30, 2025 and 2024 general and administrative expenses were $77.2 million. For both periods, lower incentive compensation expenses were offset partially by an increase in professional fees. For the three months ended September 30, 2025, other (income) expense, net was $2.0 million of income, primarily resulting from a settlement gain associated with a fire at our BMD Phoenix location in second quarter 2021. For the nine months ended September 30, 2025, other (income) expense, net was $9.6 million of income, primarily related to gains on the sale of non-operating properties in our Wood Products and BMD segments in second quarter 2025, as well as the settlement gain discussed above. Income From Operations Income from operations decreased $85.0 million to $32.3 million for the three months ended September 30, 2025, compared with $117.4 million for the three months ended September 30, 2024. Income from operations decreased $229.9 million to $167.4 million for the nine months ended September 30, 2025, compared with $397.3 million for the nine months ended September 30, 2024. Wood Products. For the three months ended September 30, 2025, segment loss was $12.1 million, compared with segment income of $53.9 million for the three months ended September 30, 2024. The decrease in segment income was due to lower EWP and plywood sales prices and sales volumes, as well as higher per-unit conversion costs. 31 Table of Contents For the nine months ended September 30, 2025, segment income decreased $178.2 million to $19.6 million from $197.9 million for the nine months ended September 30, 2024. The decrease in segment income was due to lower EWP and plywood sales prices and sales volumes, as well as higher per-unit conversion costs. These decreases in segment income were offset partially by a $3.9 million gain on the sale of a non-operating property in second quarter 2025. Building Materials Distribution. Segment income decreased $20.5 million to $54.3 million for the three months ended September 30, 2025, from $74.8 million for the three months ended September 30, 2024. The decrease in segment income was driven by a gross margin decrease of $10.6 million, resulting primarily from decreased margins on commodity and EWP products, offset partially by increased margins on general line products . Additionally, selling and distribution expenses and depreciation and amortization expense increased $7.8 million and $2.6 million, respectively. For the nine months ended September 30, 2025, segment income decreased $51.9 million to $180.7 million from $232.7 million for the nine months ended September 30, 2024. The decrease in segment income was driven by a gross margin decrease of $27.6 million, resulting primarily from lower sales volumes and decreased margins on commodity and EWP products, offset partially by increased margins on general line products. In addition, selling and distribution expenses and depreciation and amortization expense increased $19.5 million and $7.9 million, respectively. Segment income benefited from a $3.8 million gain on the sale of a non-operating property in second quarter 2025. Corporate. Unallocated corporate expenses decreased $1.4 million to $9.9 million for the three months ended September 30, 2025, from $11.3 million for the same period in the prior year. For the nine months ended September 30, 2025, unallocated corporate expenses decreased $0.2 million to $33.0 million from $33.2 million for the nine months ended September 30, 2024. The decrease in both periods was primarily due to a $1.9 million settlement gain and lower incentive compensation expense, offset partially by an increase in professional fees and employee-related expenses. Other Interest Income. Interest income decreased $6.0 million to $4.2 million for the three months ended September 30, 2025, from $10.2 million for the same period in the prior year. For the nine months ended September 30, 2025, interest income decreased $17.0 million to $14.3 million from $31.3 million for the nine months ended September 30, 2024. The decrease in both periods was due primarily to lower average balances of cash equivalents, as well as lower interest rates. Change in fair value of interest rate swaps. For information related to our interest rate swap, which expired in June 2025, see the discussion under "Interest Rate Risk and Interest Rate Swap" of Note 2, Summary of Significant Accounting Policies, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Item 1. Financial Statements" of this Form 10-Q. Income Tax Provision For the three and nine months ended September 30, 2025, we recorded $9.1 million and $41.5 million, respectively, of income tax expense and had an effective rate of 29.5% and 25.1%, respectively. For the three and nine months ended September 30, 2024, we recorded $29.8 million and $101.1 million, respectively, of income tax expense and had an effective rate of 24.7% and 24.8%, respectively. For all 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. In addition, our effective tax rate during the three months ended September 30, 2025 was adversely impacted by the effect of permanent tax differences on decreased pre-tax book income for 2025. Industry Mergers and Acquisitions On July 1, 2025, James Hardie Industries plc (James Hardie) completed the acquisition of The AZEK Company Inc. (AZEK). James Hardie is a significant supplier to our BMD segment. In addition, AZEK produces products that compete with another significant supplier to us, Trex. We have good relationships with both James Hardie and Trex and do not expect the transaction to have a material adverse impact on our distribution arrangements with either company or on our future results of operations. Liquidity and Capital Resources We ended third quarter 2025 with $511.8 million of cash and cash equivalents and $450.0 million of debt. At September 30, 2025, we had $907.0 million of available liquidity (cash and cash equivalents and undrawn committed bank line 32 Table of Contents availability). Our cash and cash equivalents decreased by $201.5 million during the nine months ended September 30, 2025, as cash provided by operations was offset by capital spending, treasury stock purchases, and dividends paid on our common stock. Further descriptions of our cash sources and uses for the nine-month comparative periods are noted below. We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to fund debt service requirements and provide cash, as required, to support our ongoing operations, capital expenditures, lease obligations, working capital, income tax payments, and to pay cash dividends to holders of our common stock over the next 12 months. We expect to fund our seasonal and intra-month working capital requirements in the remainder of 2025 from cash on hand and, if necessary, borrowings under our revolving credit facility. Sources and Uses of Cash We generate cash primarily from sales of our products, as well as short-term and long-term borrowings. Our primary uses of cash are for expenses related to the manufacture and distribution of building products, including inventory purchased for resale, wood fiber, labor, energy, and glues and resins. In addition to paying for ongoing operating costs, we use cash to invest in our business, service our debt and lease obligations, and return cash to our shareholders through dividends or common stock repurchases. Below is a discussion of our sources and uses of cash for operating activities, investing activities, and financing activities. Nine Months Ended September 30 2025 2024 (thousands) Net cash provided by operations $ 123,132 $ 343,752 Net cash used for investment (176,396) (140,144) Net cash used for financing (148,226) (391,583) Operating Activities For the nine months ended September 30, 2025, our operating activities generated $123.1 million of cash, compared with $343.8 million of cash generated in the same period in 2024. The $220.6 million decrease in cash provided by operations was due primarily to a decrease in income from operations, as well as a greater year-over-year increase in working capital, offset partially by a $53.6 million decrease in cash paid for taxes, net of refunds, compared to the same period in 2024. Working capital increased $122.8 million during the nine months ended September 30, 2025, compared with a $94.1 million increase for the same period in the prior year. See "Our Operating Results" in this Management's Discussion and Analysis of Financial Condition and Results of Operations for more information related to factors affecting our operating results. The increase in working capital during both periods was primarily attributable to higher receivables and inventories, offset by an increase in accounts payable and accrued liabilities. The increase in receivables in both periods primarily reflect increased sales of approximately 15% and 9%, comparing sales for the months of September 2025 and 2024 with sales for the months of December 2024 and 2023, respectively. Inventories increased during the nine months ended September 30, 2025 in preparation for the building season, as well as expansions at some of our BMD facilities. In addition, inventory levels for both segments were impacted by a weaker demand environment. Inventories increased during the nine months ended September 30, 2024 in preparation and response to the building season. During the nine months ended September 30, 2025, the increase in accounts payable and accrued liabilities was primarily related to the increase in inventories and extended terms offered by certain BMD vendors, offset partially by lower accrued employee incentive compensation and employee incentive compensation payouts made during the period. The increase in accounts payable and accrued liabilities during the nine months ended September 30, 2024 was primarily related to the increase in inventories, offset partially by employee incentive compensation payouts made during the period. Investment Activities During the nine months ended September 30, 2025 and 2024, we used $187.4 million and $135.8 million, respectively, of cash for purchases of property and equipment, including business improvement and quality/efficiency projects, replacement and expansion projects, and ongoing environmental compliance. During the nine months ended September 30, 2025, we received proceeds of $11.1 million from the sale of assets. During the nine months ended September 30, 2024, we also used $5.6 million of cash for acquisitions of businesses and facilities, which consisted of $3.4 million for post-transaction closing adjustments related to the BROSCO acquisition, as well as $2.2 million for acquired assets of a door and millwork operation in Boise, Idaho. 33 Table of Contents Excluding potential acquisitions, we expect capital expenditures in 2025 to total approximately $230 million to $250 million. We expect our capital expenditures, excluding potential acquisitions, to be approximately $150 million to $170 million in 2026. We expect our capital spending in 2025 and 2026 will be for business improvement and quality/efficiency projects, replacement and expansion projects, and ongoing environmental compliance. Our 2025 capital expenditures range includes additional spending on the multi-year investments at our Thorsby EWP mill and Oakdale veneer and plywood mill, as well as our greenfield distribution center in Texas. In addition, it includes the purchase of previously leased distribution centers in Chicago, Illinois and Minneapolis, Minnesota. These levels of capital expenditures could increase or decrease as a result of several factors, including efforts to further accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, availability of engineering and construction resources, and timing and availability of equipment purchases. Financing Activities During the nine months ended September 30, 2025, our financing activities used $148.2 million of cash, including $111.0 million for the repurchase of 1,128,752 shares of our common stock, $26.6 million in common stock dividend payments, and $5.9 million of tax withholding payments on stock-based awards. On April 14, 2025, we entered into a credit agreement for a $450.0 million revolving credit facility which matures on April 12, 2030. At closing, $50.0 million under the facility was borrowed. Proceeds from the facility were used to repay the $50.0 million term loan under the asset-based revolving credit facility. At September 30, 2025, we had $50.0 million of borrowings outstanding under the revolving credit facility. During the nine months ended September 30, 2024, our financing activities used $391.6 million of cash, including $220.5 million in common stock dividend payments, $158.5 million for the repurchase of 1,232,345 shares of our common stock, and $11.1 million of tax withholding payments on stock-based awards. During the nine months ended September 30, 2024, we did not borrow under our asset-based revolving credit facility. For more information related to our debt transactions and structure, our dividend policy, and our stock repurchase program, see the discussion in Note 6, Debt, and Note 9, Stockholders' Equity, respectively, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Item 1. Financial Statements" of this Form 10-Q. Other Material Cash Requirements For information about other material cash requirements, see Liquidity and Capital Resources in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Form 10-K. As of September 30, 2025, there have been no material changes in other material cash requirements outside the ordinary course of business since December 31, 2024. Guarantees Note 8, Debt, and 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 2024 Form 10-K describe 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 September 30, 2025, there have been no material changes to the guarantees disclosed in our 2024 Form 10-K. Seasonal Influences We are 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 our building products businesses, which are dependent on housing starts, repair-and-remodeling activities, and light commercial construction activities. We typically report lower sales volumes in the first and fourth quarters due to the impact of poor weather on the construction market, and we generally have higher sales volumes in the second and third quarters, reflecting an increase in construction due to more favorable weather conditions. We typically have 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 our manufacturing facilities. 34 Table of Contents Employees As of October 26, 2025, we had approximately 7,640 employees. Approximately 17% of these employees work pursuant to collective bargaining agreements. As of October 26, 2025, we had ten collective bargaining agreements. Two agreements covering approximately 730 employees at our Oakdale and Florien plywood plants expired on July 15, 2025. The terms and conditions of these agreements remain in effect pending negotiation of new agreements. We may not be able to renew these agreements or may renew them on terms that are less favorable to us than the current agreements. If any of these agreements are not renewed or extended upon their termination, we could experience a material labor disruption, strike, or significantly increased labor costs at one or more of our facilities, either in the course of negotiations of a labor agreement or otherwise. Labor disruptions or shortages could prevent us from meeting customer demands or result in increased costs, thereby reducing our sales and profitability. Disclosures of Financial Market Risks In the normal course of business, we are exposed to financial risks such as changes in commodity prices, interest rates, and foreign currency exchange rates. As of September 30, 2025, there have been no material changes to financial market risks disclosed in our 2024 Form 10-K. Environmental As of September 30, 2025, there have been no material changes to environmental issues disclosed in our 2024 Form 10-K. For additional information, see Environmental in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Form 10-K. Critical Accounting Estimates Critical accounting estimates are those that are most important to the portrayal of our financial condition and results. These estimates require management's most difficult, subjective, or complex judgments, often as a result of the need to estimate matters that are inherently uncertain. We review the development, selection, and disclosure of our critical accounting estimates with the Audit Committee of our board of directors. For information about critical accounting estimates, see Critical Accounting Estimates in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Form 10-K. At September 30, 2025, there have been no material changes to our critical accounting estimates from those disclosed in our 2024 Form 10-K. New and Recently Adopted Accounting Standards For information related to new and recently adopted accounting standards, see "New and Recently Adopted Accounting Standards" in Note 2, Summary of Significant Accounting Policies, of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in "Item 1. Financial Statements" in this Form 10-Q.