BOISE CASCADE Co

We recorded income from operations of $55.8 million during the three months ended September 30, 2026, compared with income from operations of $32.3 million during the three months ended September 30, 2025. In our BMD segment, income decreased $3.0 million to $51.3 million for the three months ended September 30, 2026, from $54.3 million for the three months ended September 30, 2025. The decrease in segment income was driven by increased selling and distribution expenses of $6.9 million, offset partially by a gross margin increase of $3.6 million. The increase in gross margin was driven by higher gross margins on commodity products, offset partially by lower gross margins on general line products. In our Wood Products segment, we recorded income of $16.1 million for the three months ended September 30, 2026, compared with a $12.1 million segment loss for the three months ended September 30, 2025. The increase in segment income was primarily due to higher plywood sales prices and EWP sales volumes, offset partially by higher per-unit conversion costs. These changes are discussed further in "Our Operating Results" below.

We ended third quarter 2026 with $385.1 million of cash and cash equivalents and $395.1 million of undrawn committed bank line availability, for total available liquidity of $780.3 million. We had $452.5 million of outstanding debt at September 30, 2026. We used $92.1 million of cash during the nine months ended September 30, 2026, as cash provided by operations was offset by capital spending, share repurchases, 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 purchase and distribute, as well as the products we manufacture, is driven primarily by new single-family residential construction, with additional demand generated by new multi-family residential construction, residential repair-and-remodeling, and light commercial activity. During the third quarter, high fuel prices and an inflation-driven increase in benchmark interest rates amplified the affordability challenges that have constrained the new home market throughout 2026. To compensate for a reduced pool of qualified homebuyers, homebuilders have pivoted toward build-to-order construction to better align housing starts with home sales and manage finished-home inventory. Activity levels in the fourth quarter are expected to exhibit typical seasonality and decelerate through the winter. Early industry projections for 2027 indicate that housing starts are expected to decline mid-single digits from 2026 levels. Beyond the near-term uncertainty, long-term residential construction fundamentals remain positive, supported by generational tailwinds and an undersupplied housing market. High homeowner equity, aging U.S. housing stock, and a growing preference among older adults to age in place support sustained growth in repair-and-remodeling spending and reinforce the industry’s underlying demand drivers.

Our distribution business, which purchases and resells a diverse range of products, may benefit from rising prices through increased sales and margins, while periods of declining prices may present challenges. Future product pricing, particularly for commodity products we distribute and manufacture, is expected to remain dynamic, influenced by economic and geopolitical conditions, duties and tariffs, input costs, industry operating rates, supply disruptions, transportation costs and availability, inventory levels, and seasonal demand patterns. Our ability to capture market share associated with recent supplier realignment is dependent upon effective execution of inventory load-in, and maintaining inventory positions sufficient to meet customer demand. Customer reliance on our distribution business increases during periods of market uncertainty, as customers respond to slowing sales with more conservative inventory practices, while greater demand certainty typically moderates this effect. We will continue to monitor end-market demand signals and align production rates and inventory stocking positions accordingly.