BCC 10-K & 10-Q changes, risk factors and insider trading

A portion of the products we manufacture or purchase and resell or manufacture are commodities whose price is determined by the market's supply and demand for such products, and the markets in which we operate are cyclical and competitive.

A portion of the building products we producedistribute or distribute,produce, including OSB, plywood, and lumber, are commodities that are widely available from othermultiple manufacturers or distributorssources with prices and volumes determined frequently in an auction market based on participants' perceptions of short-term supply and demand factors. At times, the price for any one or more of the products we producedistribute or distributeproduce may fall below our purchase or cash production or purchase costs, requiring us to either incur short-term losses on product sales or curtail production at one or more of our manufacturing facilities. Therefore, our profitability with respect to these commodity products depends, in significant part, on effective procurement and facilities maintenance and procurement programs, and on managing our cost structure, particularly raw materials and labor, which represent the largest components of our operating costs. Commodity wood product prices have historically been volatile in response to economic uncertainties, industry operating rates, supply-related disruptions, duties, tariffs, transportation constraints or disruptions, net import and export activity, trade policies, inventory levels in various distribution channels, and seasonal demand patterns.

Demand for the products we manufacture,purchase and distribute, as well as the products we purchase and distribute,manufacture, is correlated with new residential construction, residential repair-and-remodeling activity and light commercial construction in the U.S. New residential construction activity has historically been volatile with demand for new residential construction influenced by seasonal weather factors, mortgage availability and rates, housing affordability constraints, home equity levels, unemployment levels, wage growth, household formation rates, domestic population growth, immigration rates, residential vacancy and foreclosure rates, demand for second homes, consumer confidence, and other general economic factors. Furthermore, changing demographics could impact product consumption and demand, including urbanization compounding issues around affordability, increasing importance of multi-family housing, declining size of single-family entry-level housing, increasing proportion of homes using slab-on-grade construction, reduced birthing statistics, and changing baby boomer needs freeing up housing capacity.

Industry supply for the products we producedistribute and distributeproduce is influenced primarily by price-induced changes in the operating rates of existing facilities, but is also influenced over time by the introduction of new product technologies, capacity additions and closures, the restart of idled capacity, and log availability. The balance of supply and demand in the U.S. is also heavily influenced by imported products, principally from Canada and South America. The level of imported products is influenced by fluctuations in foreign currency exchange rates, duties, and tariffs.

Our products may compete with alternative products in certain market segments. For example, plastic, concrete, steel, wood/plastic or composite materials may be used by builders as alternatives to the products produced by our Wood Products segment, such as EWP and plywood. Changes in prices for oil, chemicals, and wood-based fiber can change the competitive position of our products relative to available alternatives and could increase the substitution of those products for our products. As the use of these alternatives grows, demand for our products may decline.

Our principal manufactured products are also subject to substitution from other wood-based products, such as EWP facing competition from numerous dimension lumber producers and other strand-based EWP that we do not produce, or plywood losing further market share to OSB in residential and non-residential applications. In addition, we have seen an increase in floor truss capacity by some of our dealer customers, partially due to the limited supply of I-joists over the last few years.years and lower lumber pricing. The expansion of truss manufacturing, along with the increased use of slab-on-grade construction, could negatively impact our I-joist market share and net sales prices.

We rely on various information technology systems to capture, process, store, and report data and interact with customers, vendors, and employees. We also rely on information technology systems that automate aspects of our manufacturing processes. We work to install new and upgrade existing information technology systems and provide employee awareness training around phishing, malware, and other cyber risks to ensure that we are protected, to the greatest extent possible, against cyber risks and security breaches. In the future, network, system, and data breaches could result in the misappropriation of sensitive data or operational disruptions, including interruption to systems availability and denial of access to and misuse of applications required by our customers to conduct business with us. In addition, sophisticated hardware and operating system software and applications that we procure from third parties may contain defects in design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the operation of the systems. Misuse of internal applications; theft of intellectual property, trade secrets, or other corporate assets; and unauthorized disclosure of confidential information could stem from such incidents. Delayed sales, slowed production, or other repercussions resulting from these disruptions could result in lost sales, business delays, and negative publicity and could have a material adverse effect on our operations, financial condition, or cash flows. Additionally, while insurance coverage designed to address certain aspects of cyber risks is in place, such insurance could include coverage exclusions or otherwise be insufficient to cover all losses or all types of claims that may arise in connection with such incidents.

As of February 2,15, 2025,2026, we had approximately 7,5607,660 employees. Approximately 17% of these employees work pursuant to collective bargaining agreements. As of February 2,15, 2025,2026, we had ten collective bargaining agreements. OneTwo agreementagreements covering approximately 50700 employees at our WoodinvilleOakdale BMDand facilityFlorien plywood plants expired on MayJuly 31,15, 20242025. and one agreement covering approximately 40 employees at our Vancouver BMD facility expired on December 31, 2024, but theThe terms and conditions of these agreements remain in effect pending negotiation of new agreements. One agreement covering approximately 2080 employees at our BillingsCanadian BMDEWP facility is set to expire on MarchDecember 31, 2025,2026. and two agreements covering approximately 730 employees at our Oakdale and Florien plywood plants are set to expire on July 15, 2025, but theThe terms and conditions of thesethis agreementsagreement will remain in effect after expiration, pending negotiation of a new agreements.agreement. We may not be able to renew these agreements or may renew them on terms that are less favorable to us than the current agreements. If any of these agreements are not renewed or extended upon their termination, or additional collective bargaining agreements are formed, we could experience a material labor disruption, strike, or significantly increased labor costs at one or more of our facilities, either in the course of negotiations of a labor agreement or otherwise.

In addition, our ability to attract and retain talent is challenging due to a shortage of both hourly and technically skilled workers for our manufacturingdistribution and distributionmanufacturing facilities, as well as changing workforce expectations, including flexible or remote work arrangements that we may be unable to provide. Furthermore, changes in immigration laws and/or their enforcement, could result in tighter overall labor conditions and a shortage of skilled tradespeople. Labor disruptions or shortages could prevent us from meeting customer demands or result in increased costs, thereby reducing our sales and profitability.

Our ability to offer a wide variety of products to our BMD customers is dependent upon our ability to obtain adequate product supply from manufacturers and other suppliers. Our customers' purchasing decisions for commodity products we sell are primarily based on price and availability, and these commodities may be sourced from various manufacturers. In the case of the general line and EWP products that we distribute, brand preference and product performance characteristics can have a high degree of influence on our customers' purchasing decisions. Supply chains, including key products purchased from our suppliers, may be disrupted due to labor shortages during elevated housing demand or a global health pandemic.demand. In addition, although we have agreements with many of our suppliers, such agreements are generally terminable by either party on relatively short notice. TheFurthermore, one or more of our suppliers might not adhere to our quality control, legal, regulatory, labor, human rights, or environmental standards. These deficiencies may delay or preclude delivery of merchandise to us and might not be identified before we sell such merchandise to our customers. This failure could lead to recalls and litigation and otherwise damage our reputation, increase costs, and adversely impact our business. As such, the loss of, or a substantial decrease in the availability of, products from our suppliers or the loss of key supplier arrangements could adversely impact our financial condition, operating results, and cash flows.

Our business depends on the transportation of a large number of products via rail or truck. In Wood Products, we rely on third parties for inbound receipt of raw materials and outbound movement of finished goods. In BMD, we rely primarily on third parties for inbound receipt of the products we resell and manage the outbound movement of products to our customers with a combination of internal and external resources. In Wood Products, we rely on third parties for inbound receipt of raw materials and outbound movement of finished goods. In addition, we are subject to seasonal capacity constraints and weather-related delays for rail and truck transportation.

If any of these providers fail to deliver raw materials or finished goods for resale to us in a timely manner, we may be unable to meet our customer demands. In addition, if any of our third-party transportation providers fail to deliver the goods we manufacturedistribute or distributemanufacture in a timely manner, we may be unable to sell those products at full value. In addition, if any of these third parties were to cease operations or cease doing business with us, we may be unable to replace them at a reasonable cost.

In our Pacific Northwest operations, a substantial portion of our logs are purchased from governmental authorities, including federal, state, and local governments. As a result, existing and future governmental regulation can affect our access to, and the cost of, such timber. Future domestic or foreign legislation and litigation concerning the use of timberlands, timber harvest methodologies, forest road construction and maintenance, the protection of endangered species, forest-based carbon sequestration, the promotion of forest health, and the response to and prevention of catastrophic wildfires can affect log and fiber supply from both government and private lands. Availability of harvested logs and fiber may be further limited by pandemics, fire, insect infestation, disease, ice storms, windstorms, hurricanes, flooding, changing temperature and precipitation patterns, and other natural and man-made causes, thereby reducing supply and increasing prices. Changes in global climate conditions could amplify one or more of these factors. If we are unable to negotiate purchases for our log requirements in a particular region to satisfy our log needs at satisfactory prices or at all, which could include private purchases, open-market purchases, and purchases from governmental sources, it could have ana material adverse effect on our results of operations.

We also purchase OSB, which is used as the vertical web to assemble I-joists. OSB accounted for approximately 6%5% of the aggregate amount of materials, labor, and other operating expenses (excluding depreciation) for our Wood Products segment in 2024.2025. OSB is a commodity, and prices have historically been volatile in response to economic uncertainties, industry capacity restarts and operating rates, supply-related disruptions, duties, tariffs, transportation constraints or disruptions, net import and export activity, inventory levels in various distribution channels, and seasonal demand patterns.

Wood fiber also includes, to a lesser extent than OSB, veneer purchased from third parties for engineered wood products production and lumber purchased from third parties for I-joist production at our Canadian EWP facility and for production at our laminated beam plant in Idaho. LumberVeneer and lumber input costs are subject to similar commodity-based volatility characteristics noted above for OSB. We are substantially self-sufficient for veneer needs in our Southeast operations whereas third party purchases are used to satisfy a portion of our veneer requirements at our Western Oregon operations.

Organic growth, such as greenfield investments, involves higher fixed costs and significant risks and uncertainties, including some that may not be identifiable or resolvable in due diligence. Subsequent to making the investment, the performance of the new assets is subject to economic uncertainties, as described in our other risk factors, as well as difficulties obtaining labor, customers, or suppliers. In addition, organic growth investments may divert management's attention and resources from existing operations. Our failure to effectively expand our product and service offerings inat our previouslyrecently announcedopened greenfield distribution centerscenter in Hondo, Texas and South Carolina or future projects, realize expected benefits, or manage other consequences of our organic growth could adversely affect our financial condition, operating results, and cash flows.

We evaluate potential acquisitions from time to time and have, in the past,most recently completed fiscal year and prior years, grown through acquisitions. In the future, we may be unable to successfully identify attractive potential acquisitions or effectively integrate potential acquisitions due to multiple factors, including those noted below, and potential issues related to regulatory review of the proposed transactions. We may also be required to incur additional debt in order to consummate acquisitions, which debt may be substantial and may limit our flexibility in using our cash flow from operations.

•enter into transactions with affiliates; and

•sell or transfer certain assets; andassets.

Our BMD and Wood Products and BMD segments could be negatively impacted by changes in tariffs, duties, taxes, or customs resulting from changes in U.S. and foreign trade policy. We export finished wood products and other building materials to foreign markets, primarily to Canada.Canada, the Caribbean, and Mexico. In addition, we purchase raw materials to be used as inputs in our manufacturing business and inventory purchased for resale in our distribution business from suppliers and manufacturers that are located outside of the United States. Given the nature of our business operations, actions taken by the U.S. government regarding trade policy, such as renegotiating or terminating existing trade agreements or leveraginglevying tariffs, could adversely impact our product pricing and input costs, the supply of products available to us, as well as the demand for the products we manufacturedistribute and distribute.manufacture. Further, if we experience increases in input costs, we may be unable to pass these cost increases along to our customers, thereby reducing our margins. We cannot predict future U.S. or foreign trade policy, however, the impacts of changes in trade policy discussed above could have a material adverse effect on our results of operations, cash flows, and financial condition.

Many U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of sensitive personal information. In the ordinary course of business, we capture, process, store, and transmit confidential business information and certain personal information relating to our employees, customers and vendors that are subject to these laws and regulations. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues. Ongoing efforts to comply with evolving laws and regulations may require subsequent modifications to our policies, procedures and systems. We will continue to monitor and assess the impact of regulatorychanging legislation,laws and regulations, which may impose substantial penalties for violations, increased costs for investigations, monitoring and compliance, potential litigation, and possible damage to our reputation, all of which could have a material adverse effect on our operations, financial condition, or cash flows.

In the United States, it is possible that some form of new or additional legislation and regulations will be enacted at the federal or state level to reduce or mitigate the impact of climate change. If we, or our suppliers, are required to comply with these laws and regulations, we may experience increased costs for energy, production, transportation, and raw materials, increased costs related to environmental monitoring and reporting, increased capital expenditures, or increased insurance premiums and deductibles, which could adversely impact our operations. Inconsistency of legislation and regulations among jurisdictions may also affect the costs of compliance with such laws and regulations. Any assessment of the potential impact or timing of future climate change legislation, regulations, or industry standards is uncertain, given the evolving nature of the heightened focus on climate change.

We may be involved in product liability, product warranty, casualty, manufacturing and construction defects, and other claims relating to the products we manufacturedistribute and distribute,manufacture, and services we provide. We also rely on manufacturers and other suppliers to provide us with many of the products we sell and distribute. Because we do not have direct control over the quality of such products manufactured or supplied by such third-party suppliers, we are exposed to risks relating to the quality of such products. In addition, we are exposed to potential claims arising from the conduct of our employees, and homebuilders and their subcontractors, for which we may be contractually liable. Although we currently maintain what we believe to be suitable and adequate insurance in excess of our self-insured amounts, there can be no assurance that we will be able to maintain such insurance on acceptable terms or that such insurance will provide adequate protection against potential liabilities. Product liability, product warranty, casualty, construction defect, and other claims can be expensive to defend and can divert the attention of management and other personnel for significant periods, regardless of the ultimate outcome. Claims of this nature could also have a negative impact on our reputation and customer confidence in our products and our company.Company. We cannot assure that any current or future claims will not adversely affect our financial condition, operating results, and cash flows.

In November 2017, our board of directors approved a dividend policy pursuant to which we have paid quarterly cash dividends to holders of our common stock. In addition to these quarterly dividends, we also paid special dividends in eachcertain of the last five years.periods. However, the future declarationdeclaration, including amount per share, record date and payment date, of dividends will continue to be at the discretion of our board of directors and the dividend policy may be suspended or canceled at its discretion at any time. Declaration of future dividends will depend upon legal capital requirements and surplus, our future operations and earnings, general financial condition, material cash requirements, restrictions imposed by our asset-basedrevolving credit facility and the indenture governing our senior notes, applicable laws, and other factors that our board of directors may deem relevant. Unless we continue to pay cash dividends on our common stock in the future, the success of an investment in our common stock will depend entirely upon its appreciation. Our common stock may not appreciate in value or even maintain the price at which it was purchased.

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Form 10-K. The following discussion includes statements that are forward-looking statements and are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in the section entitled "Cautionary Statement Concerning Forward-Looking Statements" and in "Item 1A. "Risk Factors." References to "fiscal year" or "fiscal" refer to our fiscal year ending on December 31 in each calendar year.

Boise Cascade is a large, integrated building materials distributor and wood products manufacturer and building materials distributor with widespread operations throughout the United States (U.S.) and one manufacturing facility in Canada. We completed an initial public offering of our common stock on February 11, 2013. We have two reportable segments: (i) Wood Products, which primarily manufactures engineered wood products (EWP) and plywood; and (ii) Building Materials Distribution (BMD), which is a wholesale distributor of building materials.materials; and (ii) Wood Products, which primarily manufactures engineered wood products (EWP) and plywood. For more information, see Note 3, Revenues, and Note 15, Segment Information, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" and "Item 1. Business" of this Form 10-K. Our products are used in the construction of new residential housing, including single-family, multi-family, and manufactured homes, the repair-and-remodeling of existing housing, the construction of light industrial and commercial buildings, and other industrial applications. We have a broad base of customers, which includes a diverse mix of dealers, home improvement centers, leading wholesalers, specialty distributors, and industrial converters. Our Wood Products and BMD segments are integrated from wood fiber procurement through distribution. During 2024,2025, approximately 70%71% of our Wood Products segment sales, or approximately 75% and 50%51% of our Wood ProductProducts segment's EWP and plywood sales volumes, respectively, were to our BMD segment.

We ended 20242025 with $713.3$477.2 million of cash and cash equivalents and $450.0 million of debt. At December 31, 2024,2025, we had $395.7$395.1 million of unused committed bank line availability. We used $236.3$236.0 million of cash during the year ended December 31, 2024,2025, as cash provided by operations was offset by capital spending, treasury stock purchases, dividends paid on our common stock, and treasuryfunding stockof purchases.an acquisition. A further description of our cash sources and uses for the comparative periods are discussed in "Liquidity and Capital Resources" below.

Demand for the products we manufacture,purchase and distribute, as well as the products we purchase and distribute,manufacture, is correlatedclosely withtied to new residential construction, residential repair-and-remodeling activity, and light commercial construction. Residential construction, particularly new single-family construction, isremains thea key demand driver for the products we manufacturedistribute and distribute.manufacture. AsIn reported2025, by the U.S. Census Bureau, housingsingle-family starts werefell 1.37short million in 2024. Current industry forecasts for U.S. housing starts are approximately 1.35 million in 2025. Single-family starts inof 2024 outpaced 2023 levels by 7%,approximately 7% and are expected to remainbe atflat approximatelyor 1.0modestly million,down despitein 2026. Home builders moderated their starts in 2025 to avoid further buildup of finished home inventory as affordability remains a persistent challenge for prospective homebuyers. Throughout 2025 builders bridged the affordabilitysupply-demand challengesgap consumerswith areincreased facingincentives and high single-digit declines in thenew currenthome rate environment.prices. Multi-family startsexperienced declined sharplygrowth in 20242025 andbut starts are expected to continuelevel to face headwindsoff in 20252026 due to prohibitive capital costs for developers,developers combined with elevatedlow levelsrent ofgrowth multi-familyand unita completionsdecrease in 2023permit andactivity. 2024.Industry Weexperts expect 2025 to reflect modest growth inflat home improvement spending,spending in 2026 as thehigh agecosts of U.S. housing stock, elevated levels of homeowner equity,borrowing and recenthistorically improvement in existinglow home salesturnover continue to constrain demand. Near term demand will providecontinue ato favorablebe backdropinfluenced forby repair-and-remodelfactors spending.such Ultimately, macroeconomic factors, the level and expectations foras mortgage rates, home affordability, home equity levels, home size, levels ofsizes, new and existing home inventory forlevels, sale,unemployment rates, and otherconsumer factorsconfidence. willLong-term influencedemand drivers for residential construction, including generational tailwinds and an undersupply of housing units, remain strong, while elevated levels of homeowner equity and an aging U.S. housing stock support robust repair-and-remodel spending and reinforce the near-termindustry’s demandsolid environment for the products we manufacture and distribute.fundamentals.

Our results of operations and financial performance are influenced by a variety of factors, including: (i) the commodity nature of a portion of the products we manufacturedistribute and distributemanufacture; (ii) general economic and industry conditions affecting demand; and (iii) cost and availability of raw materials, including wood fiber and glues and resins. These factors have historically produced cyclicality in our results of operations, and we expect this cyclicality to continue in future periods.

A portion of the building products we manufacturedistribute orand distribute,manufacture, including OSB, plywood, and lumber, are commodities that are widely available from othermultiple manufacturers or distributors,sources, with prices and volumes determined frequently in an auction market based on participants' perceptions of short-term supply and demand factors. At times, the price for any one or more of the products we producedistribute or distributeproduce may fall below our purchase or cash production or purchase costs, requiring us to either incur short-term losses on product sales or curtail production at one or more of our manufacturing facilities. Therefore, our profitability with respect to these commodity products depends, in significant part, on effective procurement and facilities maintenance and procurement programs, and on managing our cost structure, particularly raw materials and labor, which represent the largest components of our operating costs. Composite structural panel and lumber prices have been volatile historically.

In our Wood Products segment, we manufacture plywood, but not OSB, and therefore our reported prices may not trend with the overall composite panel price index. Our BMD segment purchases and resells a broad mix of commodity products with periods of increasing prices providing the opportunity for higher sales and increased margins, while declining price environments may result in declines in sales and profitability. However, we mitigate risk by utilizing rich data sets to effectively manage our inventory, which enables us to better navigate these market fluctuations and optimize our financial outcomes. In our Wood Products segment, we manufacture plywood, but not OSB, and therefore our reported prices may not trend with the overall composite panel price index. For further discussion of the impact of commodity prices, see "Our Operating Results" in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

Industry supply for the products we producedistribute and distributeproduce is influenced primarily by price-induced changes in the operating rates of existing facilities, but is also influenced over time by the introduction of new product technologies, capacity additions and closures, the restart of idled capacity, and log availability. The balance of supply and demand in the U.S. is also heavily influenced by imported products, principally from Canada and South America. The level of imported products is influenced by fluctuations in foreign currency exchange rates, duties, and tariffs.

We believe that our product line diversification provides us some protection from declines in new residential construction. Our products are used not only in new residential construction but also in residential repair-and-remodeling projects.projects and light commercial construction. We believe the overall age of the U.S. housing stock, resales of existing homes, and increased focus on making homes more energy efficient will continue to support long-term growth in repair-and-remodeling expenditures and increased demand through home improvement centers and our other customers that service professional contractors.

We also purchase OSB, which is used as the vertical web to assemble I-joists. OSB accounted for approximately 6%5% of the aggregate amount of materials, labor, and other operating expenses (excluding depreciation) for our Wood Products segment in 2024.2025. OSB is a commodity, and prices have historically been volatile in response to economic uncertainties, industry operating rates, supply-related disruptions, duties, tariffs, transportation constraints or disruptions, net import and export activity, trade policies, inventory levels in various distribution channels, and seasonal demand patterns.

Wood fiber also includes, to a lesser extent than OSB, veneer purchased from third parties for engineered wood products production and lumber purchased from third parties for I-joist production at our Canadian EWP facility and for production at our laminated beam plant in Idaho. LumberVeneer and lumber input costs are subject to similar commodity-based volatility characteristics noted above for OSB. We are substantially self-sufficient for veneer needs in our Southeast operations whereas third party purchases are used to satisfy a portion of our veneer requirements at our Western Oregon operations.

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, and sales mix and gross margin information for our BMD segment for the years ended December 31, 20242025 and 2023.2024.

For the year ended December 31, 2024,2025, total sales decreased $114.0$319.7 million, or 2%,5%, to $6,724.3$6,404.6 million from $6,838.2$6,724.3 million during the year ended December 31, 2023.2024. As described below, the decrease in sales was driven by the changes in sales prices and volumes for the products we manufacturedistribute and distributemanufacture with single-family residential construction activity being the key demand driver for our sales. During 2024,2025, total U.S. housing starts decreased 4%, whileand single-family housing starts increaseddecreased 1% and 7%, respectively, compared with 2023.2024. For the year ended December 31, 2024, average composite lumber and2025, average composite panel prices were 3%17% lowerlower, andwhile 1%average composite lumber prices were 6% higher, respectively, compared with 2023,2024, as reflected by Random Lengths composite lumberpanel and panellumber pricing.

Building Materials Distribution. During the year ended December 31, 2024,2025, sales decreased $12.2$225.2 million, or less than 1%,4%, to $5,941.3 million from $6,166.5 million from $6,178.7 million in 2023.2024. Compared with the prior year, the overall decrease in sales was driven by adecreases of 2% for both sales priceprices decrease of 3%, offset partially by aand sales volume increase of 3%. Excluding the impact of the BROSCO acquisition on October 2, 2023, sales would have decreased by 2%.volumes. By product line, commodity sales decreased 5%,6%, or $128.0$127.6 million, general line product sales increased 7%,3%, or $172.3$71.7 million, and sales of EWP (substantially all of which is sourced through our Wood Products segment) decreased 4%,13%, or $56.5$169.3 million.

Depreciation and amortization expense increased $11.6$14.1 million, or 9%,10%, to $144.1$158.2 million for the year ended December 31, 2024,2025, compared with $132.5$144.1 million during the prior year. The increase was due primarily to thepurchases BROSCOof acquisitionproperty and otherequipment, capitalincluding expenditures.the Theserecent increasesinvestments wereat our Oakdale veneer and plywood mill. The increase was offset partially by less$2.2 million of accelerated depreciation recorded in first quarter 2024 than 2023 related tofor the indefinite curtailment of lumber production at our Chapman, Alabama facility.

Selling and distribution expenses, inclusive of the BROSCO acquisition,expenses increased $35.4$21.3 million, or 6%,4%, to $594.9$616.3 million for the year ended December 31, 2024,2025, compared with $559.5$594.9 million for the prior year. The increase was due primarily toa result of higher employee-relatedprofessional expensesfees and services and information technology related costs of $21.9$8.1 million, offsetas partiallywell byas decreasedhigher incentive compensation expense of $6.6 million. Shippingshipping and handling and occupancy costs bothof increased $2.5$7.0 million. In addition, employee-related costs related to professional fees, travel and entertainment, and advertising increased $5.4$14.2 million, offset partially by lower incentive compensation expense of $12.6 million.

General and administrative expenses decreased $12.1$2.6 million, or 11%,3%, to $102.3$99.7 million for the year ended December 31, 2024,2025, compared with $114.4$102.3 million for the prior year. The decrease was primarily the result of lower incentive compensation of $9.5 million. In addition, we incurred $5.1 millionexpense of acquisition-related$7.5 expenses in the prior year for the BROSCO acquisition. These decreases weremillion, offset partially by an increase in otherprofessional employee-related expensesfees of $1.5$4.0 million.

WoodBuilding Products.Materials Distribution. For the year ended December 31, 2024,2025, segment income decreased $105.7$81.2 million to $231.5$222.2 million from $337.1$303.4 million for the year ended December 31, 2023.2024. The decreasedecline in segment income was duedriven by a gross margin decrease of $48.8 million, resulting primarily tofrom lower EWPgross margins on commodity and plywoodEWP sales prices, as well as higher wood fiber and conversion costs. These decreases in segment income wereproducts, offset partially by higherimproved EWPgross salesmargins volumes.on general line products. In addition, selling and distribution expenses and depreciation and amortization expense increased $21.8 million and $9.2 million, respectively.

Corporate. Unallocated corporate expenses decreased $3.8$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, from $48.6 million for the year ended December 31, 2023.2024. The decrease was due primarily to lower incentive compensation,compensation expense and a $1.9 million settlement gain, offset partially by an increase in otherprofessional fees and employee-related expenses.

Interest Income. Interest income decreased $9.0$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, from $48.1 million for the year ended December 31, 2023.2024. The decrease was due primarily to lower average balances of cash equivalents.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" and "Financial Instruments" included in this "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K.

For the years ended December 31, 20242025 and 2023,2024, we recorded $125.4$47.1 million and $161.4$125.4 million, respectively, of income tax expense and had an effective tax rate of 25.0%26.2% forand both25.0%, periods.respectively. Our rate is affected by recurring items, such as state income taxes, and discrete items that may occur in any given year but are not consistent from year to year.

During the yearsyear ended December 31, 20242025, the primary reasons for the difference between the federal statutory income tax rate of 21% and 2023,the effective tax rate was the effect of state taxes and nondeductible executive compensation. During the year ended December 31, 2024, 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.

We ended 20242025 with $713.3$477.2 million of cash and cash equivalents and $450.0 million of debt. At December 31, 2024,2025, we had $1,109.0$872.3 million of available liquidity (cash and cash equivalents and undrawn committed bank line availability). Our cash and cash equivalents decreased by $236.3$236.0 million during the year ended December 31, 2024,2025, as cash provided by operations was offset by capital spending, treasury stock purchases, dividends paid on our common stock, and treasuryfunding stockof purchases,an acquisition, as further discussed below.

We generate cash primarily from sales of our products, as well as short-term and long-term borrowings. Our primary uses of cash are for expenses related to the manufacturedistribution and distributionmanufacture of building products, including inventory purchased for resale, wood fiber, labor, energy, and glues and resins. In addition to paying for ongoing operating costs, we use cash to invest in our business, service our debt and lease obligations, and return cash to our shareholdersstockholders through dividends or common stock repurchases. Below is a discussion of our sources and uses of cash for operating activities, investing activities, and financing activities.

•A $105.7$81.2 million decrease in income in our BMD segment and a $225.6 million decrease in income in our Wood Products segment and a $32.4 million decrease in income in our BMD segment. See "Our Operating Results" above for a discussion on our results for 2024.2025.

•A $2.4$94.0 million decrease in cash paid for income taxes, net of refunds. During 2024,2025, cash paid for income taxes, net of refunds received was $130.6$36.6 million, compared to $133.0$130.6 million in 2023.2024. The decrease in cash paid for income taxes is primarily due to timinga ofdecrease in income taxfrom payments.operations.

During the year ended December 31, 2024,2025, we used approximately $229.6$241.4 million of cash for purchases of property and equipment, which included business improvement and quality/efficiency projects, replacement and expansion projects, and ongoing environmental compliance. Quality and efficiency projects include quality improvements, modernization, energy, and cost-saving projects. In our Wood Products segment, our 2024 capital spending includes spending to convert a plywood layup line to a parallel laminated veneer line at our Chapman, Alabama veneer and plywood mill. In addition, it includes spending on multi-year investment projects to add I-joist production capabilities at our Thorsby, Alabama EWP mill, as well as significant modernization projects at our Oakdale, Louisiana veneer and plywood mill. In our BMD segment, our 20242025 capital spending includes spending on the previously announcedour greenfield distribution centerscenter in TexasHondo, andTexas, Southwhich Carolina.was completed in August 2025. In addition, it includes the purchase of previously leased distribution centers in Westfield,Chicago, MassachusettsIllinois and Chicago,Minneapolis, Illinois.Minnesota. In our Wood Products segment, our 2025 capital spending includes additional spending on the multi-year investments at our Thorsby EWP mill and Oakdale veneer and plywood mill. Purchases of property and equipment also included approximately $5$3 million for environmental compliance in 2024.2025.

In addition, duringDuring the year ended December 31, 2024,2025, we used $10.2$33.4 million of cash for acquisitionsthe acquisition of businessesHolden and facilities, which consisted of $3.4 million for post-transaction closing adjustments related to the BROSCO acquisition, as well as $6.8 million for acquired assets of door and millwork operations in Boise, Idaho and Lakeland, Florida.Humphrey. For further discussion on thesethis acquisitions,acquisition, see Note 6, Acquisitions, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K. In addition, we received $11.6 million from the sale of assets during the year ended December 31, 2025.

Excluding potential acquisitions, we expect capital expenditures in 20252026 to total approximately $220$150 million to $240$170 million. We expect our capital spending in 20252026 will be for business improvement and quality/efficiency projects, replacement and expansion projects, and ongoing environmental compliance. Our 2025 capital expenditures range includes additional spending on the multi-year investments at our Thorsby EWP and Oakdale veneer and plywood mills, as well as our greenfield distribution centers in Texas and South Carolina, as discussed above. In addition, weWe expect to spend approximately $4 million for environmental compliance in 2025.2026, which is included in our capital spending range. This level of capital expenditures could increase or decrease as a result of several factors, including acquisitions, efforts to further accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, availability of engineering and construction resources, and timing and availability of equipment purchases.

During the year ended December 31, 2023,2024, we used approximately $215.4$229.6 million of cash for purchases of property and equipment, which included business improvement and quality/efficiency projects, replacement and expansion projects, and ongoing environmental compliance. Purchases of property and equipment also included approximately $3$5 million for environmental compliance in 2023.2024. In addition, we used $162.8$10.2 million, netmillion of cash acquired,for acquisitions of businesses and facilities, which consisted of $3.4 million for post-transaction closing adjustments related to the BROSCO acquisition.acquisition, Duringas thewell yearas ended December 31, 2023, we received $1.0$6.8 million for acquired assets of earn-outdoor incomeand relatedmillwork to a previous asset saleoperations in ourBoise, WoodIdaho Productsand segment.Lakeland, Florida.

During 2023,2024, our financing activities used $360.7$436.8 million of cash, including $346.5$228.8 million in common stock dividend payments, $6.4$194.9 million for the repurchase of 75,6781,513,095 shares of our common stock, and $5.9$11.1 million of tax withholding payments on stock-based awards. At December 31, 2023,2024, we had no borrowings outstanding under the asset-based revolving credit facility.

For more information related to our debt transactions and debt structure, our dividend policy, and our stock repurchase program, see the discussion in Note 8, Debt,Debt and Note 12, Stockholders' Equity, respectively, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K.

As of December 31, 2024,2025, we had long-term debt with varying maturities totaling an aggregate principal of $450.0 million, with no principal payments required within 12 months. Future interest payments associated with the long-term debt total approximately $124$108 million, with approximately $22 million payable within 12 months. Long-term debt and interest amounts assume our debt is held to maturity. For more information, see Note 8, Debt, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K.

We enter into various operating and finance leases for our distribution centers, as well as other property and equipment. As of December 31, 2024,2025, our minimum lease payments for operating leases were $66.5$73.7 million, with $13.1$13.5 million of lease payments required within 12 months. As of December 31, 2024,2025, our minimum lease payments for finance leases were $44.8$26.5 million, with $3.7$2.4 million of lease payments required within 12 months. These amounts exclude the undiscounted future lease payments for an additional leaseslease signed but not yet commenced as of December 31, 20242025 of approximately $9$26 million. Some lease agreements provide us with the option to renew the lease or purchase the leased property. The lease term includes any renewal option periods we are reasonably certain of exercising. Our operating and finance lease obligations could change based on whether we actually exercise these renewal options and/or if we entered into additional lease agreements. See Note 2, Summary of Significant Accounting Policies, and Note 9, Leases, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" of this Form 10-K.

We are exposed to fluctuations in quarterly sales volumes and expenses due to seasonal factors.factors impacting the level of construction activity. These seasonal factors are common in the building products industry. Seasonal changes in levels of building activity affect our building products businesses, which are dependent on housing starts, repair-and-remodeling activities, and light commercial construction activities. WeDemand typically reportrises lowerin the spring and summer months as favorable weather and increased building and remodeling projects boost sales volumesvolumes. inIn contrast, the winter months during the first and fourth quarters due to the impact of poor weather on the construction market, and we generally havebring higherlower sales volumes in the second and third quarters, reflecting an increase in construction due to morereduced favorableconstruction weatheractivity conditions.and higher operating costs, particularly for energy. We typicallyalso haveadjust higherour working capital inahead of the firstpeak building season to ensure product availability. These seasonal trends impact our sales, expenses and secondoperational quartersplanning in preparation and response tothroughout the building season. Seasonally cold weather increases costs, especially energy consumption costs, at most of our manufacturing facilities.year.

A portion of the products we manufacture or purchase and resell or manufacture and some of our key production inputs are commodities whose price is determined by the market's supply and demand for such products. Price fluctuations in our selling prices and key costs have a significant effect on our financial performance. The markets for most of these commodities are cyclical and are primarily affected by economic uncertainties, industry operating rates, supply-related disruptions, duties, tariffs, transportation constraints or disruptions, net import and export activity, trade policies, inventory levels in various distribution channels, and seasonal demand patterns. For further discussion of commodity price risk, refer to "Item 1A. Risk Factors" of this Form 10-K and "Factors That Affect Our Operating Results and Trends" in this Management's Discussion and Analysis of Financial Condition and Results of Operations.

This report on Form 10-Q contains forward-looking statements. Statements that are not historical or current facts, including statements about our expectations, anticipated financial results, projected capital expenditures, and future business prospects, are forward-looking statements. You can identify these statements by our use of words such as "may," "will," "expect," "believe," "should," "plan," "anticipate," and other similar expressions. You can find examples of these statements throughout this report, including "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations." We cannot guarantee that our actual results will be consistent with the forward-looking statements we make in this report. You should review carefully the risk factors listed in "Item 1A. Risk Factors" in our 2025 Form 10-K, as well as those factors listed in other documents we file with the Securities and Exchange Commission.Commission and the risk factor below. We do not assume an obligation to update any forward-looking statement.

We recorded income from operations of $27.8$84.0 million during the three months ended MarchJune 31,30, 2026, compared with income from operations of $54.5$80.5 million during the three months ended MarchJune 31,30, 2025. In our BMD segment, income decreased $15.5$7.9 million to $32.9$70.1 million for the three months ended MarchJune 31,30, 2026, from $48.4$78.0 million for the three months ended MarchJune 31,30, 2025. The decrease in segment income was driven by increased selling and distribution expenses and depreciation and amortization expense of $8.2$10.8 million and $1.7 million, asrespectively. well as a $6.5 million gross margin decrease, resulting primarily from lower gross margins on all product lines, particularly EWP. In our Wood Products segment, income decreased $9.2 million to $8.5 million for the three months ended March 31, 2026, from $17.7 million for the three months ended March 31, 2025. The decrease inAdditionally, segment income wasin primarilysecond duequarter to2025 lowerbenefited EWPfrom salesa prices,$3.8 asmillion wellgain ason higherthe per-unitsale EWPof conversiona costs.non-operating property. These decreases in segment income were offset partially by a gross margin increase of $9.2 million, resulting from higher gross margins on commodity and general line products, which were offset partially by lower per-unitgross OSBmargins costs,on EWP. In our Wood Products segment, income increased $11.7 million to $25.7 million for the three months ended June 30, 2026, from $14.0 million for the three months ended June 30, 2025. The increase in segment income was primarily due to higher plywood sales prices and sales volumes, as well as higherlower plywoodper-unit OSB costs. These increases in segment income were offset partially by lower EWP sales volumesprices and saleshigher prices.per-unit conversion costs. Additionally, segment income in second quarter 2025 benefited from a $3.9 million gain on the sale of a non-operating property. These changes are discussed further in "Our Operating Results" below.

We ended firstsecond quarter 2026 with $338.7$304.8 million of cash and cash equivalents and $395.1 million of undrawn committed bank line availability, for total available liquidity of $733.8$699.9 million. We had $452.5 million of outstanding debt at MarchJune 31,30, 2026. We used $138.5$172.4 million of cash during the threesix months ended MarchJune 31,30, 2026, to fund seasonal working capital increases, capital spending, share repurchases, and dividends paid on our common stock. A further description of our cash sources and uses for the three-monthsix-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, isdepends closelyprimarily tied toon new single-family residential construction, with additional demand driven by new multi-family residential construction, residential repair-and-remodeling activity,repair-and-remodeling, and light commercial construction.activity. Residential construction, particularly new single-family construction, remains a key demand driver forDuring the productssecond wequarter, distribute and manufacture. Thethe operating environment duringremained the first quarter of 2026 presented a mix of opportunitiesuneven and challenges.competitive. For much of the quarter, mortgage rates declined to their lowest levels in over three years. However, recentOngoing geopolitical turmoiluncertainty, hasvolatile ledTreasury to volatility in treasuryyields and mortgage ratesrates, alike,and castingpersistent unpredictabilityinflation continue to weigh on the remaindermacroeconomic ofoutlook. theAgainst springthis selling season. Consumer sentiment and home affordability challenges persist as the most prominent headwinds tobackdrop, residential construction activity.remains subdued, as affordability constraints and low consumer sentiment pressure market conditions. In addition,response, homehomebuilders buildershave arerelied respondingon incentives to the cautiousstimulate demand environmentwhile withmaintaining thoughtfuldiscipline approachesaround to starts, home sizes, location,starts and spec inventory. Long-termBeyond demandnear-term driversvolatility, forlong-term residential construction,construction includingfundamentals remain constructive, supported by generational tailwinds and an undersupply ofundersupplied housing units,market. remain strong, while elevated levels ofHigh homeowner equity and an aging U.S. housing stock support robustsustained repair-and-remodel spending and reinforce the industry’s solid fundamentals.underlying demand drivers.

Our distribution business, which purchases and resells a diverse range of products, experiencesmay opportunitiesbenefit forfrom rising prices through increased sales and margins during periods of rising prices,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, input costs, industry operating rates, supply disruptions, duties, tariffs, cost and availability of transportation, inventory levels, and seasonal demand patterns. We will continue to monitor end market demand signals and align production rates and inventory stocking positions accordingly.

The following tables set forth our operating results in dollars and as a percentage of sales for the three and six months ended MarchJune 31,30, 2026 and 2025:

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 six months ended MarchJune 31,30, 2026 and 2025:

For the three months ended MarchJune 31,30, 2026, total sales decreasedincreased $37.9$91.2 million, or 2%,5%, to $1,498.6$1,831.3 million from $1,536.5$1,740.1 million during the three months ended MarchJune 31,30, 2025. For the six months ended June 30, 2026, total sales increased $53.3 million, or 2%, to $3,329.9 million from $3,276.6 million for the same period in the prior year. As described below, the decreasechange in sales in both periods was driven by the changes in sales prices and volumes for the products we distribute and manufacturemanufacture, with single-family residential construction activity being the key demand driver for our sales. In firstsecond quarter 2026, total U.S. housing starts increased 1% whileand single-family housing starts decreased 5%,1% and 4%, respectively, compared with the same period in 2025. On a year-to-date basis through June 2026, total U.S. housing starts were flat, while single-family housing starts decreased 5% compared to the same period in 2025. Average composite panel and average composite lumber prices for the three and six months ended MarchJune 31,30, 2026 were 15%8% and 5%2% higher, respectively, than in the same periods in the prior year, as reflected by Random Lengths composite lumber pricing. Average composite panel prices for the three and six months ended June 30, 2026 were 1% and 8% lower, respectively, than in the same periodperiods in the prior year, as reflected by Random Lengths composite panel and composite lumber pricing.

Building Materials Distribution. Sales decreasedincreased $18.2$82.6 million, or 1%,5%, to $1,388.9$1,697.5 million for the three months ended MarchJune 31,30, 2026, from $1,407.1$1,614.9 million for the three months ended MarchJune 31,30, 2025. Compared with the same quarter in the prior year, theThe overall decreaseincrease in sales was driven by net sales pricevolume decreases of 3%, offset partially byand net sales volumeprice increases of 2%.4% and 1%, respectively. By product line, general line product sales increased 4%,9%, or $25.4$62.7 million; commodity sales decreasedincreased 5%,7%, or $24.1$38.6 million; and EWP sales (substantially all of which are sourced through our Wood Products segment) decreased 7%,6%, or $19.5$18.7 million.

Wood Products. Sales, including sales to our BMD segment, decreasedincreased $17.6$12.4 million, or 4%,3%, to $398.2$459.6 million for the three months ended MarchJune 31,30, 2026, from $415.8$447.2 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease in sales was driven by higher plywood sales prices and sales volumes of 15% and 3%, respectively, resulting in increased sales of $18.8 million and $4.1 million, respectively. These increases were offset partially by lower sales prices of 7% for both LVLI-joists and I-joistsLVL (collectively referred to as EWP), resulting in decreased sales of $8.5 million7% and $6.9 million, respectively. Additionally, sales volumes for I-joists and LVL decreased by 5% and 1%,4%, respectively, resulting in decreased sales of $5.1$7.5 million and $1.4$5.9 million, respectively. TheseAdditionally, decreases were offset partially by higher plywoodEWP sales volumes anddecreased salesby prices of 3% and 1%, respectively,2%, resulting in increaseddecreased sales of $4.5$5.3 million.

Materials, labor, and other operating expenses (excluding depreciation) decreasedincreased $21.1$62.0 million, or 2%,4%, to $1,255.1$1,503.5 million for the three months ended MarchJune 31,30, 2026, compared with $1,276.2$1,441.5 million during the same period in the prior year. In BMD, the decreaseincrease in materials, labor, and other operating expenses was driven by lower purchased materials costs as a result of lower prices, offset partially by increased sales volumes,volumes compared with firstsecond quarter 2025. However, materials,Materials, labor, and other operating expenses as a percentage of sales (MLO rate) in our BMD segment increased 3020 basis points, driven by lower margin percentages on general line products and EWPEWP, offset partially by higher margin percentages on commodity products. In our Wood Products segment, materials, labor, and other operating expenses decreased primarily due to reduced purchases of external veneer for our Alexandria EWP mill, as operations resumed at our Oakdale veneer and plywood mill following planned downtime to complete significant mill modernization projects in 2025. Additionally, lower per-unit costs of OSB (used in the manufacture of I-joists), lower other manufacturing costs, and decreased EWP sales volumes contributed to the decrease in MLO.volumes. These decreases were offset partially by higher labor costs compared with firstsecond quarter 2025. However, theThe MLO rate in our Wood Products segment increaseddecreased by 150410 basis points, primarily as the result of lowerhigher EWPplywood sales prices and volumes,sales which resulted in decreased leveraging of costs.volumes.

Depreciation and amortization expense increased $1.9$5.3 million, or 5%,14%, to $39.1$42.7 million for the three months ended MarchJune 31,30, 2026, compared with $37.1$37.4 million during the same period in the prior year. For the six months ended June 30, 2026, these expenses increased $7.2 million, or 10%, to $81.8 million, compared with $74.5 million in the same period in the prior year. The increase in both periods was primarily due to acquisitionrecent andinvestments 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 and the recent investments at our Oakdale veneer and plywood mill.segment.

Selling and distribution expenses increased $6.8$12.0 million, or 5%,7%, to $150.4$173.8 million for the three months ended MarchJune 31,30, 2026, compared with $143.6$161.8 million during the same period in the prior year. The increase was due primarily to higher shipping and handling costs of $6.2 million, as well as higher employee-related expenses of $4.9$5.6 million. For the six months ended June 30, 2026, selling and distribution expenses increased $18.8 million, or 6%, to $324.2 million, compared with $305.5 million during the same period in 2025. The increase was primarily a result of higher employee-related expenses of $10.5 million, as well as higher shipping and handling costs of $2.3$8.5 million.

General and administrative expenses increased $1.3$0.8 million, or 5%,3%, to $26.3$27.3 million for the three months ended MarchJune 31,30, 2026, compared with $25.0$26.5 million for the same period in the prior year. For the six months ended June 30, 2026, general and administrative expenses increased $2.1 million, or 4%, to $53.6 million, compared with $51.5 million during the same period in 2025. The increase in both periods was due primarily to higher employee-related expenses.expenses and incentive compensation expense.

Income from operations decreasedincreased $26.7$3.4 million to $27.8$84.0 million for the three months ended MarchJune 31,30, 2026, compared with $54.5$80.5 million for the three months ended MarchJune 31,30, 2025. Income from operations decreased $23.3 million to $111.8 million for the six months ended June 30, 2026, compared with $135.0 million for the six months ended June 30, 2025.

Building Materials Distribution. Segment income decreased $15.5$7.9 million to $32.9$70.1 million for the three months ended MarchJune 31,30, 2026, from $48.4$78.0 million for the three months ended MarchJune 31,30, 2025. The decrease in segment income was driven by increased selling and distribution expenses and depreciation and amortization expense of $8.2$10.8 million and $1.7 million, asrespectively. wellAdditionally, assegment income in second quarter 2025 benefited from a $6.5$3.8 million gain on the sale of a non-operating property. These decreases in segment income were offset partially by a gross margin decrease,increase of $9.2 million, resulting from higher gross margins on commodity and general line products, which were offset partially by lower gross margins on all product lines, particularly EWP.

Wood Products. Segment income decreasedincreased $9.2$11.7 million to $8.5$25.7 million for the three months ended MarchJune 31,30, 2026, from $17.7$14.0 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease in segment income was primarily due to lowerhigher EWPplywood sales prices,prices and sales volumes, as well as higherlower per-unit EWP conversionOSB costs. These decreasesincreases in segment income were offset partially by lower per-unit OSB costs, as well as higher plywoodEWP sales volumesprices and sales prices. Additionally, operations resumed at our Oakdale veneer and plywood mill following planned downtime in 2025 to complete significant mill modernization projects, which provided a favorable impact onhigher per-unit conversion costs. Additionally, segment income in second quarter 2025 benefited from a $3.9 million gain on the sale of a non-operating property.

Corporate. Unallocated corporate expenses increased $2.0$0.3 million to $13.6$11.8 million for the three months ended MarchJune 31,30, 2026, from $11.6$11.5 million for the same period in the prior year. The increase was primarily due to higher incentive compensation expense and other employee-related expenses. For the six months ended June 30, 2026, unallocated corporate expenses increased $2.4 million to $25.4 million from $23.1 million for the six months ended June 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, in accordance with our self-insured risk retention program.

Interest Income. Interest income decreased $2.6$2.5 million to $2.9$2.2 million for the three months ended MarchJune 31,30, 2026, from $5.5$4.6 million for the same period in the prior year. For the six months ended June 30, 2026, interest income decreased $5.0 million to $5.1 million from $10.1 million for the six months ended June 30, 2025. The decrease in both periods was due primarily to lower average balances of cash equivalents, as well as lower interest rates.

For the three and six months ended MarchJune 31,30, 2026 and 2025,2026, we recorded $6.6$21.2 million and $13.8$27.8 million, respectively, of income tax expense and had an effective tax rate of 27.0% in both periods. For the three and 25.5%,six months ended June 30, 2025, we recorded $18.6 million and $32.5 million, respectively, of income tax expense and had an effective tax rate of 23.1% and 24.1%, respectively. For bothall 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.

We ended firstsecond quarter 2026 with $338.7$304.8 million of cash and cash equivalents and $452.5 million of debt. At MarchJune 31,30, 2026, we had $733.8$699.9 million of available liquidity (cash and cash equivalents and undrawn committed bank line availability). Our cash and cash equivalents decreased by $138.5$172.4 million during the threesix months ended MarchJune 31,30, 2026, as we used cash to fund seasonal working capital increases, capital spending, share repurchases, and dividends paid on our common stock. Further descriptions of our cash sources and uses for the three-monthsix-month comparative periods are noted below.

We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to fund debt service requirements and provide cash, as required, to support our ongoing operations, capital expenditures, lease obligations, working capital, income tax payments, and to pay cash dividends to holders of our common stock over the next 12 months. We expect to fund our seasonal and intra-month working capital requirements in the remainder of 2026 from cash on hand and, if necessary, borrowings under our revolving credit facility.

For the threesix months ended MarchJune 31,30, 2026, our operating activities usedgenerated $16.0$26.3 million of cash, compared with $28.5$4.7 million of cash usedgenerated in the same period in 2025. The $12.5$21.6 million decreaseincrease in cash usedprovided forby operations was due primarily to a lesser year-over-year increase in working capital,capital and a $13.6 million decrease in cash paid for taxes, net of refunds, offset partially by a decrease in income from operations.operations, compared to the same period in 2025. Working capital increased $80.5$142.4 million during the threesix months ended MarchJune 31,30, 2026, compared with a $123.7$170.3 million increase for the same period in the prior year. See "Our Operating Results" in this Management's Discussion and Analysis of Financial Condition and Results of Operations for more information related to factors affecting our operating results.

The increase in working capital during both periods was primarily attributable to higher receivables and inventories, offset by an increase in accounts payable and accrued liabilities. The increase in receivables in both periods primarily reflect increased sales of approximately 26%44% and 18%,22%, comparing sales for the months of MarchJune 2026 and 2025 with sales for the months of December 2025 and 2024, respectively. Inventories increased during theboth threeperiods monthsdue endedto Marchseasonally 31,higher 2026inventory purchases in preparationour BMD segment for the spring building season, as well as participation in certain BMD vendors' early-buy programs. These higher inventory levels were offset partially by the use of log inventory to support manufacturing activity in our Wood Products segment. Inventories increased during the three months ended March 31, 2025 in preparation for the springsummer building season, as well as participation in certain BMD vendors' early-buy programs. During both the threesix months ended MarchJune 31,30, 20262026, the increase in accounts payable and accrued liabilities was related to the increase in inventories and extended terms offered by certain BMD vendors. During the six months ended June 30, 2025, the increase in accounts payable and accrued liabilities was primarily related to the increase in inventories and extended terms offered by certain BMD vendors, offset partially by employee incentive compensation payouts made during the quarter and lower accrued rebates.period.

During the threesix months ended MarchJune 31,30, 2026 and 2025, we used $39.8$63.3 million and $53.2$132.3 million, respectively, of cash for purchases of property and equipment, including business improvement and quality/efficiency projects, replacement and expansion projects, and ongoing environmental compliance. During the six months ended June 30, 2025, we received proceeds of $10.2 million from the sale of assets.

During the threesix months ended MarchJune 31,30, 2026, our financing activities used $83.1$135.7 million of cash, including $65.5$108.3 million for the repurchase of 830,7511,404,815 shares of our common stock, $10.4$18.1 million in common stock dividend payments, and $6.2 million of tax withholding payments on stock-based awards. During the threesix months ended MarchJune 31,30, 2026, non-cash investing and financing activities included the issuance of a $2.5 million promissory note to partially finance a property purchase. During the threesix months ended MarchJune 31,30, 2026, we did not borrow under our revolving credit facility. At MarchJune 31,30, 2026, we had $50.0 million of borrowings outstanding under the revolving credit facility.

During the threesix months ended MarchJune 31,30, 2025, our financing activities used $70.8$114.8 million of cash, including $53.9$86.0 million for the repurchase of 482,700837,352 shares of our common stock, $10.5$18.4 million in common stock dividend payments, and $5.9 million of tax withholding payments on stock-based awards. DuringOn theApril three months ended March 31,14, 2025, we didentered notinto borrowa credit agreement for a $450.0 million revolving credit facility which matures on April 12, 2030. At closing, $50.0 million under ourthe facility was borrowed. Proceeds from the facility were used to repay the $50.0 million term loan under the asset-based revolving credit facility.

For information about other material cash requirements, see Liquidity and Capital Resources in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Form 10-K. As of MarchJune 31,30, 2026, there have been no material changes in other material cash requirements outside the ordinary course of business since December 31, 2025.

Note 8, Debt, and Note 16, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2025 Form 10-K describe the nature of our guarantees, including the approximate terms of the guarantees, how the guarantees arose, the events or circumstances that would require us to perform under the guarantees, and the maximum potential undiscounted amounts of future payments we could be required to make. As of MarchJune 31,30, 2026, there have been no material changes to the guarantees disclosed in our 2025 Form 10-K.

As of AprilJuly 26,19, 2026, we had approximately 7,6607,740 employees. Approximately 17% of these employees work pursuant to collective bargaining agreements. As of AprilJuly 26,19, 2026, we had tennine collective bargaining agreements. One agreement covering approximately 7080 employees at our Canadian EWP facility is set to expire on December 31, 2026. The terms and conditions of this agreement will remain in effect after expiration, pending negotiation of a new agreement.

In the normal course of business, we are exposed to financial risks such as changes in commodity prices, interest rates, and foreign currency exchange rates. As of MarchJune 31,30, 2026, there have been no material changes to financial market risks disclosed in our 2025 Form 10-K.

As of MarchJune 31,30, 2026, there have been no material changes to environmental issues disclosed in our 2025 Form 10-K. For additional information, see Environmental in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Form 10-K.

Critical accounting estimates are those that are most important to the portrayal of our financial condition and results. These estimates require management's most difficult, subjective, or complex judgments, often as a result of the need to estimate matters that are inherently uncertain. We review the development, selection, and disclosure of our critical accounting estimates with the Audit Committee of our board of directors. For information about critical accounting estimates, see Critical Accounting Estimates in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Form 10-K. At MarchJune 31,30, 2026, there have been no material changes to our critical accounting estimates from those disclosed in our 2025 Form 10-K.