Boise Cascade (NYSE:BCC) reported higher second-quarter sales and Wood Products earnings as plywood prices and volumes improved, while the company outlined a broad distribution expansion with James Hardie that it expects will create near-term transition costs but support longer-term growth.
Consolidated sales rose 5% from a year earlier to $1.8 billion in the second quarter. Net income was $57.3 million, or $1.63 per share. Chief Executive Officer Jeff Strom said both net income and earnings per share exceeded the prior-year quarter when excluding gains on asset sales reflected in last year’s results.
James Hardie partnership expands nationwide
Boise Cascade said it will become James Hardie’s sole nationwide distribution partner across Hardie Siding and Trim, AZEK Exteriors, and TimberTech Decking and Railing products. Under the arrangement, James Hardie will consolidate its distribution network across regional markets, while Boise Cascade will transition away from competing siding and PVC trim product lines.
Strom called the agreement a growth opportunity and said Boise Cascade expects to compete for business previously supplied through James Hardie’s other distribution relationships. He also highlighted the ability to offer a complete product line nationally, particularly to home centers, and said the company sees an opportunity to convert customers from its existing decking business.
Jo Barney, executive vice president of Building Materials Distribution, said the combined exterior-products portfolio could help reduce transaction costs for customers by allowing them to use one purchase order, receive one delivery truck and work with one sales representative. She said Boise Cascade has more than 600 salespeople across the country who will work alongside the James Hardie and TimberTech/AZEK sales teams.
The transition will take multiple quarters, management said. Boise Cascade plans to work down inventory from legacy suppliers through the remainder of 2026, begin loading James Hardie products into many locations in September, and begin selling the full suite of James Hardie products in the fourth quarter. The company said it will provide further updates through 2026 and into 2027.
Chief Financial Officer Kelly Hibbs said near-term results will be affected by the supplier transition, including inventory wind-down activities and the timing of James Hardie’s exits from prior distribution arrangements. Financial support under the agreement begins Oct. 1 as Boise Cascade ramps sales of the expanded product lineup.
Distribution margins decline despite sales growth
Building Materials Distribution, or BMD, posted second-quarter sales of $1.7 billion, up 5% from the prior-year period. Sales volume increased 4%, while pricing contributed 1%. General line product sales rose 9% and commodity product sales increased 7%, while engineered wood products, or EWP, sales declined 6%.
BMD segment EBITDA was $85.6 million, down from $91.8 million a year earlier. The comparison included a $3.8 million gain on the sale of a non-operating property in the prior-year quarter. BMD’s EBITDA margin declined to 5.0% from 5.7%, reflecting lower gross margins, higher selling and distribution costs, and the prior-year asset-sale gain.
Gross margin was 15.2%, down 20 basis points year over year. Competitive pressure reduced margins on general line products and EWP, although higher lumber prices improved commodity-product margins. Selling and distribution expenses increased $10.8 million from a year earlier, with roughly half of that increase tied to higher fuel and outbound delivery costs.
For the third quarter, Boise Cascade expects BMD EBITDA of $53 million to $68 million and gross margins of 14% to 14.75%. Hibbs said the majority of the expected sequential EBITDA decline is attributable to supplier transition activities, with softer end-market demand also contributing.
Wood Products benefits from plywood pricing
Wood Products sales, including sales to the distribution segment, increased 3% year over year to $459.6 million. Segment EBITDA rose to $52.4 million from $37.3 million in the prior-year quarter, which had included a $3.9 million gain from the sale of the company’s former Roxboro, North Carolina, property.
The EBITDA increase primarily reflected higher plywood prices and sales volumes, along with lower per-unit OSB costs used in I-joist manufacturing. Those gains were partly offset by lower EWP sales prices and higher per-unit conversion costs.
Plywood sales volume totaled 368 million feet, compared with 356 million feet a year earlier. Average plywood net sales prices increased 15% both year over year and sequentially to $393 per thousand. Hibbs attributed the improvement in pricing to lower imports, noting Brazilian imports declined 25% year over year through the second quarter. New Section 301 tariffs are now in effect and may influence market conditions in coming months, he said.
I-joist and LVL volumes each declined 2% from the year-earlier period but rose 18% and 17%, respectively, from the first quarter. Management said some customers accelerated second-quarter purchases ahead of a planned EWP price increase and amid concerns over transportation constraints.
Boise Cascade expects Wood Products EBITDA of $22 million to $57 million in the third quarter. The company expects EWP volumes to decline by a mid-single-digit percentage sequentially, while plywood volumes are expected to decline by a low-single-digit percentage. It expects EWP pricing to rise slightly sequentially as a roughly 3% price increase is implemented over time, though contractual obligations will delay full realization.
Capital spending and shareholder returns
Boise Cascade spent $63 million on capital expenditures in the first six months of 2026 and maintained its full-year capital spending range of $150 million to $170 million. The company repurchased approximately $108 million of common stock during the first half, including about $43 million during the second quarter. About $130 million remained available under its repurchase program at quarter-end.
The board also approved a 5% increase in the quarterly dividend to $0.23 per share, payable in mid-September. Strom said the company believes its integrated manufacturing and distribution model, financial position and investments through the business cycle will help it capitalize on long-term housing and repair-and-remodel demand drivers.
About Boise Cascade (NYSE:BCC)
Boise Cascade Company operates as a leading manufacturer and distributor of wood products and building materials in North America. The company’s operations are organized into two primary segments: wood products manufacturing and building materials distribution. In its manufacturing segment, Boise Cascade produces a wide array of engineered wood products, including plywood, oriented strand board (OSB), lumber, particleboard and laminated veneer lumber (LVL), serving residential, commercial and industrial customers.
In its distribution segment, Boise Cascade sources and delivers building materials through an extensive network of distribution centers, servicing professional builders, remodelers, contractors and industrial customers.
