BOISE CASCADE Co

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, 2026 and 2025:

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 three and nine months ended September 30, 2026 and 2025:

(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.

Sales

For the three months ended September 30, 2026, total sales increased $134.4 million, or 8%, to $1,802.2 million from $1,667.8 million during the three months ended September 30, 2025. For the nine months ended September 30, 2026, total sales increased $187.7 million, or 4%, to $5,132.1 million from $4,944.4 million for the same period in the prior year. As described below, the increase in sales in both periods 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. In third quarter 2026, total U.S. housing starts and single-family housing starts decreased 4% and 2%, respectively, compared with the same period in 2025. On a year-to-date basis through September 2026, total U.S. housing starts and single-family housing starts decreased 1% and 4%, respectively, compared to the same period in 2025. Average composite panel prices for the three and nine months ended September 30, 2026 were 14% higher and 2% 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, 2026 were 25% and 9% higher, respectively, than in the same periods in the prior year, as reflected by Random Lengths composite lumber pricing.

Building Materials Distribution. Sales increased $113.3 million, or 7%, to $1,669.5 million for the three months ended September 30, 2026, from $1,556.2 million for the three months ended September 30, 2025. The overall increase in sales was driven by net sales price and net sales volume increases of 5% and 2%, respectively. By product line, general line product sales increased 4%, or $31.0 million; commodity sales increased 15%, or $78.8 million; and EWP sales (substantially all of which are sourced through our Wood Products segment) increased 1%, or $3.5 million.

During the nine months ended September 30, 2026, sales increased $177.7 million, or 4%, to $4,755.9 million from $4,578.2 million for the same period in the prior year. The overall increase in sales was driven by increases of 2% for both net sales prices and net sales volumes. By product line, general line product sales increased 6%, or $118.8 million; commodity sales increased 6%, or $93.5 million; and sales of EWP decreased 4%, or $34.6 million.

Wood Products. Sales, including sales to our BMD segment, increased $64.8 million, or 16%, to $461.2 million for the three months ended September 30, 2026, from $396.4 million for the three months ended September 30, 2025. The increase in sales was driven by higher plywood sales prices of 31%, resulting in increased sales of $36.2 million. In addition, higher sales volumes for LVL and I-joists (collectively referred to as EWP) of 18% and 10%, respectively, resulted in increased sales of $19.8 million and $9.2 million, respectively. These increases were offset partially by lower plywood sales volumes of 7%, resulting in decreased sales of $8.2 million. EWP sales prices were consistent with the same period in the prior year.

For the nine months ended September 30, 2026, sales, including sales to our BMD segment, increased $59.6 million, or 5%, to $1,319.0 million from $1,259.5 million for the same period in the prior year. The increase in sales was driven by higher plywood sales prices of 15%, resulting in increased sales of $56.3 million. In addition, sales volumes for LVL and I-joists increased 4% and 1%, respectively, resulting in increased sales of $15.9 million and $2.9 million, respectively. These increases were offset partially by lower I-joist and LVL sales prices of 5% and 4%, respectively, resulting in decreased sales of $31.0 million. Plywood sales volumes were consistent with the same period in the prior year.

Costs and Expenses

Materials, labor, and other operating expenses (excluding depreciation) increased $102.3 million, or 7%, to $1,506.6 million for the three months ended September 30, 2026, compared with $1,404.3 million during the same period in the prior year. In BMD, the increase in materials, labor, and other operating expenses was driven by increased prices for products purchased for resale, as well as higher sales volumes compared with third quarter 2025. Materials, labor, and other operating expenses as a percentage of sales (MLO rate) in our BMD segment increased 80 basis points, driven by lower margin percentages on general line products, offset partially by higher margin percentages on commodity products. Our MLO rate was also impacted by an increased proportion of sales attributed to commodity products, which have lower margins than general line products and EWP. In our Wood Products segment, materials, labor, and other operating expenses increased primarily due to higher labor and other conversion costs, higher EWP sales volumes, and higher costs of glues and resins compared with third quarter 2025. However, the MLO rate in our Wood Products segment decreased by 530 basis points, primarily as the result of higher plywood sales prices and higher EWP sales volumes.

For the nine months ended September 30, 2026, materials, labor, and other operating expenses (excluding depreciation) increased $143.2 million, or 3%, to $4,265.1 million, compared with $4,122.0 million in the same period in the prior year. In BMD, the increase in materials, labor, and other operating expenses was driven by increased prices for products purchased for resale, as well as higher sales volumes compared with the first nine months of 2025. The BMD segment MLO rate increased 50 basis points, driven by lower margin percentages on general line products, offset partially by higher margin percentages on commodity products. In our Wood Products segment, materials, labor, and other operating expenses increased primarily due to higher labor and other conversion costs, as well as higher costs of glues and resins. These increases were offset partially by lower costs of OSB compared with the first nine months of 2025. However, the MLO rate in our Wood Products segment decreased by 260 basis points, primarily as the result of higher plywood sales prices.

Depreciation and amortization expense increased $0.4 million, or 1%, to $42.7 million for the three months ended September 30, 2026, compared with $42.4 million during the same period in the prior year. For the nine months ended September 30, 2026, these expenses increased $7.6 million, or 6%, to $124.5 million, compared with $116.9 million in the same period in the prior year. The increase in both periods was primarily due to recent investments in support of our EWP capabilities in our Wood Products segment, as well as organic growth and a fourth quarter 2025 acquisition in our BMD segment.

Selling and distribution expenses increased $7.6 million, or 5%, to $172.7 million for the three months ended September 30, 2026, compared with $165.1 million during the same period in the prior year. The increase was due primarily to higher shipping and handling costs of $6.9 million, as well as higher employee-related expenses of $2.6 million. For the nine months ended September 30, 2026, selling and distribution expenses increased $26.4 million, or 6%, to $497.0 million, compared with $470.5 million during the same period in 2025. The increase was primarily a result of higher shipping and handling costs of $15.4 million, as well as higher employee-related expenses of $13.1 million.

General and administrative expenses decreased $1.2 million, or 4%, to $24.6 million for the three months ended September 30, 2026, compared with $25.8 million for the same period in the prior year. The decrease was due primarily to lower professional fees, offset partially by higher incentive compensation expense. For the nine months ended September 30, 2026, general and administrative expenses increased $0.9 million, or 1%, to $78.2 million, compared with $77.2 million during the same period in 2025. The increase was due primarily to higher employee-related expenses and incentive compensation expense, offset partially by lower 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 increased $23.5 million to $55.8 million for the three months ended September 30, 2026, compared with $32.3 million for the three months ended September 30, 2025. Income from operations increased $0.2 million to $167.6 million for the nine months ended September 30, 2026, compared with $167.4 million for the nine months ended September 30, 2025.

Building Materials Distribution. 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.

For the nine months ended September 30, 2026, segment income decreased $26.4 million to $154.3 million from $180.7 million for the nine months ended September 30, 2025. The decrease in segment income was driven by increased selling and distribution expenses and depreciation and amortization expense of $25.8 million and $2.7 million, respectively. These decreases in segment income were offset partially by a gross margin increase of $6.4 million, resulting from higher gross margins on commodity products, which were offset partially by lower gross margins on EWP and general line products.

Wood Products. For the three months ended September 30, 2026, segment income was $16.1 million, compared with segment loss of $12.1 million 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.

For the nine months ended September 30, 2026, segment income increased $30.6 million to $50.2 million from $19.6 million for the nine months ended September 30, 2025. The increase in segment income was primarily due to higher plywood sales prices and sales volumes, higher EWP sales volumes, and lower per-unit OSB costs. These increases in segment income were offset partially by lower EWP sales prices and higher per-unit conversion costs.

Corporate. Unallocated corporate expenses increased $1.6 million to $11.5 million for the three months ended September 30, 2026, from $9.9 million for the same period in the prior year. The increase was primarily due to a $1.9 million settlement gain recognized in third quarter 2025, which reduced expenses in the prior-year period. For the nine months ended September 30, 2026, unallocated corporate expenses increased $4.0 million to $37.0 million from $33.0 million for the nine months ended September 30, 2025. The increase was primarily due to the absorption of approximately $1.8 million of estimated insurance losses related to a fire at our Florien veneer and plywood facility in first quarter 2026 under our self-insured risk retention program, as well as the $1.9 million settlement gain in 2025, which reduced expenses in the prior-year period.

Other

Interest Income. Interest income decreased $2.1 million to $2.1 million for the three months ended September 30, 2026, from $4.2 million for the same period in the prior year. For the nine months ended September 30, 2026, interest income decreased $7.1 million to $7.2 million from $14.3 million for the nine months ended September 30, 2025. The decrease in both periods was due primarily to lower average balances of cash equivalents, as well as lower interest rates.

Income Tax Provision

For the three and nine months ended September 30, 2026, we recorded $14.4 million and $42.2 million, respectively, of income tax expense and had an effective tax rate of 28.4% and 27.5%, respectively. 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 tax rate of 29.5% and 25.1%, 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 rates during the three months ended September 30, 2026 and 2025 were adversely impacted because permanent tax differences had a greater effect relative to the lower levels of pre-tax book income during those periods.