Boise Cascade profits plummet in Q1
Boise battles lower sales prices and lower volume during the quarter.
Boise Cascade Company reported that first quarter 2019 sales fell 12% to $1 billion from sales of $1.2 billion in the first quarter last year.
The Boise, Idaho-based building products manufacturer and distributor also reported a first quarter net income of $11.4 million – a 69% drop from a net income of $37 million during the same period a year ago.
Wood Products sales, including sales to Building Materials Distribution (BMD), decreased $78.5 million, or 20%, to $319.5 million for the quarter from $398 million in the first quarter 2018. The decline in sales was driven primarily by lower sales prices and sales volumes for plywood, the company said.
Boise also said that about one-third of the decrease in sales was due to lower sales volumes of lumber and particleboard due to the sale or closure of three lumber mills and a particleboard plant during 2018. These decreases were offset by increases in EWP sales prices.
Building Material Distribution (BMD) sales decreased $84.7 million, or 9%, to $907.7 million for the three months ended March 31, 2019, from $992.4 million for the three months ended March 31, 2018. The decrease was driven by sales price and sales volume decreases of 6% and 3%, respectively. Excluding the impact of the acquisition of wholesale building material distribution locations in Nashville, Tennessee, Medford, Oregon, and Cincinnati, Ohio during 2018, BMD sales would have decreased 11%, the company said.
Bottom Line: Sales fall 12% to $1 billion while profits tumble 69% to $37 million.
What the CEO said: “First quarter results were challenging given low commodity wood products pricing and adverse weather held back construction activity in many parts of the country. We expect second quarter will serve as a better gauge of underlying demand for 2019,” commented Tom Corrick, CEO. “I am pleased that we made further progress on our strategy to grow our distribution business through the acquisition of American Lumber in Birmingham, Ala., which was completed in late April. The team at American enjoys an excellent reputation in the markets they serve and has been an outstanding distributor of our engineered wood products for many years.”
Company info: Read Boise Cascade’s full first quarter report here.
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