BOISE CASCADE Co

The following tables set forth our operating results in dollars and as a percentage of sales for the years ended December 31, 2025 and 2024:

Sales Volumes and Prices

Set forth below are historical U.S. housing starts data, sales mix and gross margin information for our BMD segment, and segment sales volumes and average net selling prices for the principal products sold by our Wood Products segment for the years ended December 31, 2025 and 2024.

(a) Actual U.S. housing starts as reported by the U.S. Census Bureau.

(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.

2025 Compared With 2024

Sales

For the year ended December 31, 2025, total sales decreased $319.7 million, or 5%, to $6,404.6 million from $6,724.3 million during the year ended December 31, 2024. As described below, the decrease in sales was driven by the changes in sales prices and volumes for the products we distribute and manufacture with single-family residential construction activity being the key demand driver for our sales. During 2025, total U.S. housing starts and single-family housing starts decreased 1% and 7%, respectively, compared with 2024. For the year ended December 31, 2025, average composite panel prices were 17% lower, while average composite lumber prices were 6% higher, compared with 2024, as reflected by Random Lengths composite panel and lumber pricing.

Building Materials Distribution. During the year ended December 31, 2025, sales decreased $225.2 million, or 4%, to $5,941.3 million from $6,166.5 million in 2024. Compared with the prior year, the overall decrease in sales was driven by decreases of 2% for both sales prices and sales volumes. By product line, commodity sales decreased 6%, or $127.6 million, general line product sales increased 3%, or $71.7 million, and sales of EWP (substantially all of which is sourced through our Wood Products segment) decreased 13%, or $169.3 million.

Wood Products. During the year ended December 31, 2025, sales, including sales to our BMD segment, decreased $218.9 million, or 12%, to $1,613.4 million from $1,832.3 million in 2024. The decrease in sales was driven by lower sales prices for LVL and I-joists (collectively referred to as EWP) of 11% and 10%, respectively, resulting in decreased sales of $56.1 million and $41.7 million, respectively. Additionally, sales volumes for I-joists and LVL decreased 8% and 2%, respectively, resulting in decreased sales of $37.4 million and $12.6 million, respectively. 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. Plywood sales prices and sales volumes decreased 6% and 4%, respectively, resulting in decreased sales of $31.1 million and $20.3 million, respectively. Plywood sales volumes were impacted by planned downtime to complete significant mill modernization capital projects at our Oakdale plywood mill.

Costs and Expenses

Materials, labor, and other operating expenses (excluding depreciation) decreased $42.9 million, or 1%, to $5,350.7 million for the year ended December 31, 2025, compared with $5,393.6 million during the prior year. 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 2024. However, materials, labor, and other operating expenses as a percentage of sales (MLO rate) in our BMD segment increased 20 basis points, primarily due to lower margin percentages on our commodity sales compared with 2024. In our Wood Products segment, materials, labor, and other operating expenses increased due to higher other manufacturing costs compared with 2024. These increases were offset partially by decreased sales volumes of EWP and plywood, as well as lower costs of OSB compared with 2024. The MLO rate in our Wood Products segment increased by 1,140 basis points, due primarily to lower sales prices and sales volumes for both EWP and plywood, which resulted in decreased leveraging of manufacturing costs. The MLO rate was also impacted by planned downtime to complete significant mill modernization capital projects at our Oakdale plywood mill.

Depreciation and amortization expense increased $14.1 million, or 10%, to $158.2 million for the year ended December 31, 2025, compared with $144.1 million during the prior year. The increase was due primarily to purchases of property and equipment, including the recent investments at our Oakdale veneer and plywood mill. 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 $21.3 million, or 4%, to $616.3 million for the year ended December 31, 2025, compared with $594.9 million for the prior year. The increase was primarily a result of higher professional fees and services and information technology related costs of $8.1 million, as well as higher shipping and handling and occupancy costs of $7.0 million. In addition, employee-related costs increased $14.2 million, offset partially by lower incentive compensation expense of $12.6 million.

General and administrative expenses decreased $2.6 million, or 3%, to $99.7 million for the year ended December 31, 2025, compared with $102.3 million for the prior year. The decrease was primarily the result of lower incentive compensation expense of $7.5 million, offset partially by an increase in professional fees of $4.0 million.

Other (income) expense, net was $3.6 million of income for the year ended December 31, 2025, primarily related to gains on the sale of non-operating properties in our BMD and Wood Products segments of $3.8 million and $3.9 million, respectively, as well as a $1.9 million settlement gain associated with a fire at our BMD Phoenix location in second quarter 2021. These gains were offset partially by approximately $6 million related to an accrual for legal proceedings in our BMD segment.

Income From Operations

Income from operations decreased $306.7 million to $183.3 million for the year ended December 31, 2025, compared with $490.0 million for the year ended December 31, 2024.

Building Materials Distribution. For the year ended December 31, 2025, segment income decreased $81.2 million to $222.2 million from $303.4 million for the year ended December 31, 2024. The decline in segment income was driven by a gross margin decrease of $48.8 million, resulting primarily from lower gross margins on commodity and EWP products, offset partially by improved gross margins on general line products. In addition, selling and distribution expenses and depreciation and amortization expense increased $21.8 million and $9.2 million, respectively.

Wood Products. For the year ended December 31, 2025, segment income decreased $225.6 million to $5.8 million from $231.5 million for the year ended December 31, 2024. The decrease in segment income was due primarily to lower EWP and plywood sales prices and sales volumes, as well as higher per-unit conversion costs, which were impacted, in part, by planned downtime to complete significant mill modernization capital projects at our Oakdale plywood mill. These decreases in segment income were offset partially by a $3.9 million gain on the sale of a non-operating property.

Corporate. Unallocated corporate expenses decreased $0.1 million to $44.7 million for the year ended December 31, 2025, from $44.8 million for the year ended December 31, 2024. The decrease was due primarily to lower incentive compensation expense and a $1.9 million settlement gain, offset partially by an increase in professional fees and employee-related expenses.

Other

Interest Income. Interest income decreased $20.4 million to $18.8 million for the year ended December 31, 2025, from $39.1 million for the year ended December 31, 2024. The decrease 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 "Disclosures of Financial Market Risks" included in this "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K.