Good morning. My name is Michelle, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Boise Cascade First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer period. If you would like to ask a question during that time, simply press star one one on your telephone keypad. If you would like to withdraw your question, please press star one one again. It is now my pleasure to introduce you to Kelly Hibbs, Senior Vice President, CFO, and Treasurer, Boise Cascade. Mr. Hibbs, you may begin your conference. Thank you, Michelle, and good morning, everyone. I would like to welcome you to Boise Cascade's 1st quarter 2023 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO, Mike Brown, head of our Wood Products operations, and Jeff Strom, head of our Building Materials Distribution operations. Turning to slide 2. This call will contain forward-looking statements. Please review the warning statements in our press release on the presentation slides and in our filings with the SEC regarding the risks associated with these forward-looking statements. Also, please note that the appendix includes reconciliations from our GAAP net in-net income to EBITDA and adjusted EBITDA and segment income to segment EBITDA. I will now turn the call over to Nate. Thanks, Kelly. Good morning, everyone. Thank you for joining us, earnings call today. I'm on slide number 3. Both of our businesses delivered solid financial results despite the expected weaker environment from lower single-family housing starts and commodity product pricing. Total U.S. housing starts declined 18%, driven by a decrease in single-family housing starts of 29% compared to the prior year quarter. Our consolidated first quarter sales of $1.5 billion were down 34% from first quarter 2022. Our net income was $67 million or $2.43 per share, compared to net income of $302.6 million or $7.61 per share in the year ago quarter. Wood Products reported segment EBITDA of $93.2 million in the first quarter compared to $203.8 million in the year ago quarter. The Wood Products team delivered very good financial results in an environment that required thoughtful management of production levels given the uncertainties relative to demand. Building Materials Distribution reported segment EBITDA of $76.8 million on sales of $1.4 billion for the first quarter, compared to $232.5 million of segment EBITDA on sales of $2.1 billion in a comparative prior year quarter. BMD was negatively impacted by significantly lower commodity pricing and also experienced lower sales volumes compared to the prior year quarter due to declining housing starts. However, demand for two-step distribution remains healthy. Our ability to provide next-day service on a range of products and services provides value to our customers as we collectively partner to manage volume and price risk during periods of market uncertainty. Kelly will now walk through the financial results in more detail and provide an update on capital allocation, after which I'll provide our outlook before we take your questions. Kelly? Thanks, Nate. Wood Products sales in the first quarter, including sales to our distribution segment, were $437.4 million, compared to $558.9 million in first quarter 2022. As Nate mentioned, Wood Products reported segment EBITDA of $93.2 million, down from EBITDA of $203.8 million in the year ago quarter. The decrease in segment EBITDA was due primarily to lower plywood sales prices, lower EWP sales volumes, and higher per unit conversion costs. These decreases were offset partially by higher EWP sales prices, higher plywood sales volumes, and lower OSB costs used in the manufacture of I-joists. BMD sales in the quarter were $1.4 billion, down 35% from first quarter 2022. BMD reported segment EBITDA of $76.8 million in the first quarter, compared to segment EBITDA of $232.5 million in the prior year quarter. The decrease in segment EBITDA was driven by a gross margin decrease of $177.3 million, resulting primarily from lower margins on commodity products and lower sales volumes across product lines, offset partially by decreased selling and distribution expenses of $20.3 million. Turning to slide 5. Our first quarter sales volumes for I-joists and LVL were down 41% and 22% respectively on a year-over-year basis. On a sequential basis, volumes increased by 28% and 15%, a favorable result when compared to new single-family housing starts data. Pricing in the first quarter for I-joists and LVL were down 15% and 9% respectively on a sequential basis. Looking forward to second quarter, we are experiencing good seasonal momentum and currently expect both I-joists and LVL volumes to be higher on a sequential basis. New single family starts will continue to be an important demand driver for EWP volumes, with I-joists also impacted by product substitutes and construction methods in certain geographies that reduce the wood floor opportunity. We continue to experience pricing pressures for EWP. We expect further EWP price declines in the second quarter, although at slower rates of decline than experienced in the first quarter. Turning to slide 6. Our first-quarter plywood sales volumes in Wood Products was 406 million feet, compared to 317 million feet in first quarter 2022. The increase in plywood sales volumes was partially attributed to the acquisition of the Chapman, Alabama and Havana, Florida mills in July of last year. In addition, less demand for veneer from our EWP operations resulted in more plywood production from our legacy plywood facilities. The 367 per thousand average plywood net sales price in first quarter was down 47% from first quarter 2022 and down 7% sequentially. Thus far in the second quarter of 2023, plywood price realizations are flat compared to our first quarter average. Moving to slide 7 and 8. BMD's first quarter sales were $1.4 billion, down 35% from first quarter 2022, driven by sales price and sales volume decreases of 20% and 15% respectively. By product line, commodity sales decreased 50%, general line product sales decreased 13%, and sales of EWP decreased 24%. The gross margin percentage for BMD was 14.8%, down 320 basis points from the 18% reported in first quarter of 2022. BMD's EBITDA margin was 5.6% for the quarter, down from the 11% reported in the year ago quarter. Looking forward, BMD sales pace thus far in second quarter 2023 is seasonally stronger with our daily average sales pace up low double digits from first quarter levels. A continued flat pricing environment for commodity products when coupled with price erosion risks on other products will limit margin expansion opportunities. We fully expect BMD to continue to execute at a high level and deliver solid financial results. Moving to slides 9 and 10. These slides show the generally flat environment for lumber and panel pricing during first quarter 2023, compared with noticeable increases for the majority of the prior year quarter. For further context, year-over-year average composite lumber and panel prices have declined by more than 50%. As previously referenced, this sharp price deflation has meaningful impacts on the portion of our sales related to commodity products. Future commodity products pricing may be volatile, but within tighter ranges than seen in recent years as the industry attempts to adjust supply to levels needed to support an uncertain near-term demand environment. I'm now on slide 11. We had capital expenditures of $30 million in the first quarter, with $7 million of spending in Wood Products and $23 million of spending in BMD. In BMD, our capital expenditures included the previously announced purchase of a new facility to house an additional door shop in Kansas City, Missouri, which we expect to be operational in late second quarter of this year. Our capital spending range for 2023 remains $120 million-$140 million, which includes the continuation of our multi-year capacity expansion projects in EWP and further investment in BMD organic growth projects. As we've noted before, supply chain challenges and availability of engineering and construction resources will influence our ability to execute on these levels of capital expenditures. In addition, our balance sheet allows us the ability to pursue additional growth organically or via M&A. Speaking to shareholder returns, we paid $8 million in regular dividends to shareholders in the first quarter, and yesterday our board approved a quarterly dividend of $0.15 per share, as well as a special dividend of $3 per share, both payable on June 15th. We have no near-term debt maturities and had total available liquidity at March 31st of approximately $1.4 billion, which reflects our cash and availability under our committed bank line. After payment of our second quarter dividends, which will total approximately $125 million, our balance sheet will remain very strong and our balanced approach to capital allocation is unchanged. We will continue to invest in our existing asset base and organic growth projects, pursue M&A that aligns with our strategy, remain committed to our fixed dividend through the business cycle, and return additional capital to shareholders as appropriate via special dividends or share repurchases. I will turn it back over to Nate to discuss our business outlook. Thanks, Kelly. I'm on slide number 12. Housing starts in March 2023 were approximately 1.424 million housing on a seasonal adjusted annual rate basis as reported by the U.S. Census Bureau. Mortgage rates have declined from peak levels in late 2022, and measures of builder sentiment have improved from fourth quarter of 2022 levels. Home affordability remains a challenge for consumers and the Federal Reserve's ongoing actions in response to inflationary data and what impacts these actions have on future mortgage rates and the broader economy will influence the near-term demand environment. Uncertainty in the full-year outlook for 2023 is reflected in various industry forecasts for 2023 U.S. housing starts, which generally range from 1.2 million to 1.4 million housing start units, compared with actual housing starts of 1.55 million in 2022, as reported by the U.S. Census Bureau. Despite the near-term uncertainty, we believe the longer-term demand drivers for new residential construction continue to be favorable, supported by strong demographic trends and an underbuilt housing stock. Regarding home improvement spending, the age of U.S. housing stock and elevated levels of homeowner equity have provided a favorable backdrop for repair and remodel spending. Industry forecasts project continued moderation in year-over-year growth in renovation spending and economic uncertainty may also negatively impact homeowners' further investment in their residences. In Wood Products, we are focused on continuing to execute on our targeted investments to expand our EWP capacity in the Southeast U.S. The near-term weakness in new residential construction does not detract from our conviction to grow EWP capacity. We will also closely monitor the changing housing market landscape and maintain the flexibility to adjust production levels as appropriate to meet sales demand. BMD continues with a steady execution of organic growth. For example, our brownfield project in Walton, Kentucky is operational. We expect a late second quarter startup in our new door assembly operation in Kansas City, and our greenfield expansion in Marion, Ohio should be complete and functional by the end of this year. Our new distribution centers planned in Hondo, Texas and Walterboro, South Carolina are further on the horizon. They remain well-positioned to continue our pursuit of additional organic growth and M&A growth opportunities. BMD's approach and consistency in the marketplace remains unchanged. We'll continue to prudently manage our inventory levels and price risk, while at the same time not sacrificing our service commitment to our vendor and customer partners. Lastly, I wanna express my gratitude to our associates, whose proven strength and resilience, when coupled with our effectiveness of our business model, has allowed us to continue to deliver solid financial results despite the weaker environment. Thank you for joining us today and your continued support and interest in Boise Cascade. We'd welcome any questions at this time. Michelle, would you please open the phone lines? As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. The first question comes from Kurt Yinger with D.A. Davidson. Your line is now open. Great. Thanks. Good morning, everyone. Morning, Kurt. I just wanted to start off on BMD. Sorry about that. As you look at the volume down 20% in Q1, is your view that that's really just end market demand, or were there any kind of lingering destocking impacts in certain areas? Then second, you talked about kind of the reasons it might be difficult to generate margin expansion versus Q1. Is there anything that's working against you, or are you seeing any normalization in certain product categories that would make it worse? Kurt, it's Jeff. I would tell you on demand in the first quarter, there was still a little bit of residual destocking that was going on as people were really focused on their net working capital, and they're trying to get their inventories in line, and we feel like we're there. There's been a big focus on that. That definitely was going on all quarter long. Obviously with the less, you know, decrease in housing starts, that played a big impact on that. Yeah. I think on your second question, Kurt, around the comments around our, you know, the pricing environment limiting our margin expansion opportunity. The concept there is, you know, if we continue to have a generally flat commodity pricing environment and there, you know, there is some exposure to price degradation, you know, some in EWP and potentially in general line, that will limit our margin expansion opportunities. That's what we're trying to get at there. Got it. Okay. No, that's great. On EWP pricing, you talked about some additional pressure in Q2, which hopefully doesn't surprise anyone. We've also kinda heard that with orders coming back, there's been some nice stabilization. I guess without pinning you down on where you think prices will be in the back half, are you any more confident in the idea that we could see pricing find a bottom here in the next few months relative to where you might've been at the start of the year? Good day, Kurt. It's Mike here. I'll take a stab at answering that. EWP pricing, as I'm sure you are well aware, is obviously very market specific and market driven. When we started the year, you know, our estimation of housing starts were one thing, and I think actually if anything, they're probably a bit more robust at this point in time than we had originally anticipated, which may be part of the explanation of the relatively small decline that we've seen in EWP pricing thus far. As we look out further into the year, I think the same analogy or process of determining pricing applies. If we have pretty good housing starts, I think the decline in EWP pricing will be, relatively speaking, somewhat more muted. If that's not the case, then it could be quite, you know, somewhat more significant. Be hard to tell at the moment, but, I'm sort of quite happy with where we ended up at the end of Q1. Got it. That's helpful. Thanks, Mike. Then just my last one. If, if my eyes don't deceive me, it looks like you might have purchased a bit of stock in Q1. Any change in terms of how that ranks in the capital allocation stack or priorities, just given where valuation is and the performance of the business thus far? Good question, Kurt. Let me maybe just kinda hit the overarching capital allocation discussion as part of that question. Yes, we did purchase a very modest amount of shares during the third quarter. I will tell you in terms of our overall approach to capital allocation, you know, we did note that the board, you know, announced an ample but we think appropriately sized special dividend at this stage of the year. We're fully committed to our capital spending plans that Nate spoke to, and we have a handful of additional growth opportunities that we're currently working. You know, you line all that up, and then we will continue to have our ongoing dialogue on capital allocation with our board, and it's reasonably likely we will be having additional things to discuss around growth initiatives and additional shareholder returns to share before we close the books on 2023. Included in that, the rewarding shareholders, that's got three prongs, as we've always talked about, the regular quarterly dividend, special dividends, and/or share repurchases. Really no change to the strategy and thinking. Okay. Thanks for that, Kelly, and good luck here in Q2, guys. Thank you, Kurt. Please stand by for the next question. The next question comes from Susan Maklari with Goldman Sachs. Your line is open. Thank you. Good morning, everyone. Morning, Sue. My first question is I want to go back to the commentary on the potential for the margin deceleration in the general line of BMD in there. When we think about some of the commentary we've heard from the building product companies in the last few weeks and what the builders are telling us on the ground, it actually sounds like activity is seasonally building into the spring and the summer. I guess, what are the factors that you're thinking about that are offsetting some of that? you know, how are you thinking about the puts and the takes of where that margin can go and how those factors could come together given the macro uncertainty? Let me start that one specific to your question around general line, and I'll let Jeff jump in here as he deems it appropriate. We have not seen a lot of price pressure on general line. It's holding. It's been holding, and that's generally across product lines. EWP, yeah, we have seen some pressure, and that impacts both Wood Products and does impact BMD as well. Then on commodities, again, we were just flagging that because, you know, as you know, when prices escalate, that gives us margin expansion opportunity. If they come off, the reverse comes true. We've seen a little bit of strength of late in OSB, and so maybe we'll get a little bit of tailwind there. I think back to your other part of your question around order files and kind of some seasonal strength. Yes, we are seeing that. We are experiencing that. Our order files in plywood are, you know, kind of 2-3 weeks kind of a thing. EWP, our order files have expanded nicely compared to where we were at the start of the year. And there's a, you know, a fair bit of positive commentary coming out from the home builders. There certainly is some seasonal strength we're experiencing. This is Jeff. On the general line margins, they have been very sticky. They've been holding in there very well on overall general line. There's been an item or two that's moved back a little bit. If there's any real pressure on that at all right now, it's on items that are imported. The pressure is not that the base material has dropped. It's that the ocean freight has dropped so significantly. Those are some of the things where we're feeling it. Hey, Sue, it's me. Maybe just one final thought on that. Yeah. Sorry, Sue. It's me. One final thought on that is if you think about the, you know, the purchase, kind of cadence from our customers, instead of kind of bulk in terms of rail car or truck, we're still experiencing a lot of out-of-warehouse services to support units, job packs and pieces. If you think about margin profile and what that kind of represents in BMD, we think that that's gonna remain a tailwind as we go through the course of 2023 because customers are still really managing their inventory risk and reward pretty carefully. Okay. All right. That's helpful. Would you say in general that what you're hearing on the ground from your suppliers versus your customers is in line? Is it consistent, or do you think one is a little more optimistic relative to the other? For me, Sue, we had a chance to work that, and I think there's a range of opinions, and some of it is dependent upon the markets that they're, you know, they're in. Those that are maybe more centered on, you know, single family have had a tougher go, just given what the demand dynamics have been. But I think to me, probably the optimism that's in the market today speaks to maybe an improved environment relative to maybe their expectations, you know, 90 or 120 days ago. While it's off, maybe it's not off to the degree that they were expecting. I think there is, you know, good, you know, sentiment in the marketplace overall. I think there is still risk out there relative to, you know, things like debt ceilings, you know, some of the banking issues that are out there. I think there's, you know, the right level of kind of hesitancy as well as we, you know, kind of go through the second quarter and the second half of the year. Okay. All right. One more question is you gave us an update on some of those BMD expansion initiatives, which is helpful. As you think about the setup here and where we are, can you talk to your appetite for new projects? Is there anything else on the horizon that you're looking at or that we should be aware of? Nothing specifically to, you know, that we can flag for you today, Sue. In terms of what we spoke to in terms of a handful of additional opportunities we are working, those are the same kind of things we've been executing on over the last couple of years in terms of, you know, looking to scale our door shop operations, looking to expand in existing footprints, as well as look for additional footprints we can expand to. It's very much the same sort of strategy and the same kind of things, but nothing we can speak to specifically today. Okay. All right. That's helpful. Thank you. Good luck with everything. Thank you. Please stand by for the next question. The next question comes from George Staphos, Bank of America. Your line is now open. Hi, everyone. Good morning. Hope you're doing well. Thanks for the details. Hope you can hear me well, too. I guess the first question that I had was related to what your customers are telling you about their inventories, either of wood products, or of other products that you would be selling into them. Where do you think inventories are right now, guys? The second question I had is around EWP. Recognizing you don't disclose this, where would you say EWP margins are relative to what you think a normal or trend line would be over the last, you know, 10 years? Then I had a couple of follow-ons. Hey, George, this is Jeff. I'll take the inventory question, start with that because we're in constant conversations with our dealers about that and where they sit. As I said earlier, it has been an unbelievable focus on net working capital and days of inventory, days of sales on hand, and people have really been driving to that. The one thing that maybe has changed in the last few days a little bit, in the beginning of the year, I'd tell you nobody would take a position on a commodity whatsoever. In some of the bigger markets right now, people are feeling a little bit better, cautiously optimistic that they may add a few days for commodities. Otherwise, it is strictly managed and it's a tight range right now. Understood. Okay, George, it's Mike. Good to hear you. I'll address the EWP margins question. I think as everybody is aware over the last couple of years, the expansion in margins on that particular product line has been really very strong relative to any historical numbers that we've seen. Obviously, there's been some pullback. If you think about where I'll say in general the market is today relative to where it might have been before the pandemic or before this latest run up, we're still above what historically would have been called normal. My personal view is I hope that remains to be the case because of the situation, not the least of which is the changing cost structure that we face in manufacturing. You know, as a result of things like increasing wages and various other components of our cost structure, I'm not sure that the prior normal pricing, be it on EWP or for that matter, other Wood Products, is sort of a good metric to be used going forward. Yeah. Mike, just following on that, I was speaking specifically about margin, which would incorporate the labor and other costs of manufacturing, at least in terms of the way I was thinking about as I asked the question. If you incorporate that and think about the margin for EWP, recognizing you're not going to give it to the basis point, would you say that margins are still above normal? Is there a way to maybe roughly sort of give us guardrails on that, on how much they might be? Is the expectation you hold these levels because of, you know, the secular trends that favor EWP over time or not? Yeah. George, let me try it. You're right. Oh, please, Kelly. No, you're good. We won't give you to the basis point for sure. I guess I would say, just as a good reminder, we really need to think about margins kind of in BMD in totality, because you know, there's a lot of integration between our plywood and veneer facilities and our EWP facilities. Has the margin expanded from where it was several years back? Yes, absolutely. Because the price escalation has exceeded the cost escalation. That's true. In terms of where it goes from here, and where normal might be several years from now, we don't want to make that call. I think it's gonna be dependent upon markets and supply and demand. I would tell you in terms of EWP capacity, there's really no new capacity that's been announced. You know, we're gonna be able to grow more because we now have the veneer availability that we now have from Chapman and Havana. In terms of, you know, when markets recover to a more normalized level, we feel good about our position and our ability to maintain share and our position in the market. Understood. I appreciate that, Kelly. On that point, can you remind us how much of Coastal's capacity is ultimately going to be integrated into LVL, and for that matter, I-joist? Then one last one, I will turn it over and come back to Q. Recognizing that commodity prices will swing these percentages around, do you have a longer-term target that you could remind us of in terms of where you would like EWP and general line to be in your overall revenue mix in BMD? You know, whatever interval you want to give us. Next year, five years from now, what have you. Thanks. George, I'll have a stab at your question around the Chapman and Havana thing. When we made the acquisition, we put out some numbers. It really is not so much about how much of the veneer production at Chapman and Havana would go into EWP initially. I think what we said was that after we have made some additional capital investments in our existing EWP mills and some other small investments in existing plywood mills, that we saw that the total increase in billet volume, EWP billet volume was going to be approximately 3.5 million cubic feet. We didn't go into the details of, as I recall, about how much of the capacity from Havana and Chapman that represented. What I will tell you as a sort of a general statement is we should have some additional stress-rated veneer, so that is the veneer that is suitable to go into EWP over and beyond the 3.5 million cubic feet of LVL or Phyllis capacity that we would initially see. To utilize that would require us to make some additional investments. That was really part of the rationale behind us not getting out in front of ourselves too early in this discussion. I think it's best to leave it like that at the moment. Yeah, we are very, very focused on getting the capital investments made to be able to get that 3.5 million cubic feet of EWP, additional EWP production. Yeah. Then specific to your question around BMD sales mix and the proportion between commodity general line and EWP, you know, over the last, you know, five quarters, it swung between 40% and low 50%, the commodity portion of that. Obviously, there's been a lot of price fluctuation within that. We're, you know, with commodity prices where they are, you know, maybe we're back to more of a normal mix, kind of 40% general, commodity, 40%-ish general line, and 20%-ish EWP. I think if we go forward from here, I wanna make it clear we're not looking to downsize our position in commodity. We just expect it to be a smaller proportion of our sales as we move forward. We would expect the general line and EWP portions to grow, and then, you know, and the commodity portion, you know, as opposed to being around 40, you know, I think over time, you know, probably something more like mid-30s would be a more what we'd expect to see in terms of the mix. Kelly, that's great. Thank you so much. I'll turn it over. You bet. Thank you, George. Please stand by for our next question. The next question comes from Ketan Mamtora with BMO. Your line is open. Good morning, and thanks for taking my questions. First one, Nate or Kelly, I was curious. I mean, it sounds like, you know, millwork is a focus area, you know, for you guys. Can you talk about sort of the relative attractiveness of the millwork business as we think about, you know, the total distribution chain, whether it is two-steppers and one-steppers? Yeah. Ketan, good question. I think in terms of our millwork and our door investment, we feel, as always, we always start the conversation with how do we better serve the marketplace and our customers. Our customers have looked to us to continue to kinda grow that capability and that franchise in support of what they're trying to get accomplished. For us, it matches really well with our current customers, kind of across the spectrum in terms of how they think about, you know, supporting their millwork business. I think the other thing for me is we have strong vendor alignment and partnerships and we feel good about those relationships as we move forward. The other thing that we talked about, Ketan, is just that earnings stability and consistency. For me, our door franchise, our millwork business absolutely supports that and reinforces that and allows us to, you know, continue to kind of drive our earnings performance as an organization as we move forward. To me, it's again starts with kind of the customer as always, the marketplace and the support. I think the expectations they have from us are high there, which is great. Again, it matches very well with our strategy in terms of the, you know, growing that capability, including the earnings performance as a result. got it. No, that's helpful. And Nate, just one follow-up on that. You talked about the earnings stability in that business. Is the margin profile in general over a period of time if you look at it, is the margin profile also different, materially different in terms of just the level of margin in that business? Yeah. I think. Yeah, absolutely. I think that the margin profile is higher. It's more consistent and steady. We don't see the, you know, the volatility that you would see perhaps on other products, including in general line. Higher levels, I think there's a high ability to serve and touch in terms of some of the services that we provide. And certainly margin profile is part of that storyboard, Ketan. Yeah, I would say each of those is how we think about it, and again, reinforces, I think our commitment and excitement about how do we continue to grow that platform. Understood. No, that's helpful. Then just one last one from my side. As we think about, you know, capital allocation, and, you know, to Kelly's comments earlier, in terms of additional optionality, can you just remind us again, your thought process around, you know, kind of either share repurchases or, obviously, you guys have a, you know, pretty good history in recent years of special dividends. Just remind us kind of how you approach, you know, these two, and what are sort of the puts and takes as you think about capital allocation. Yeah. I'll take that, Ketan. I think your question was centered mostly on when we get to the shareholders and how do we think about returning capital there. That's correct. Yeah, our first priority is really first and foremost thinking about the company, how we make sure we support the asset base we have and look to grow the asset base we have in the right places and in the right manners. Then, you know, and then, and also, you know, what might be ahead of us, and how does that then stack up versus what our, what our balance sheet capabilities are. So then we begin the discussion with that dialogue, and then we follow up with, okay, now how do we wanna think about returning cash to shareholders? So what you said in terms of share repurchases and dividends, which either that's regular quarterly, which we look to grow over time or special. That's all of that's part of the conversation. I would say that's just an ongoing active dialogue, you know. That can vary quarter by quarter just depending on what the opportunities are, what the landscape is, and we'll continue that dialogue with the board, and we will never lose sight of the shareholders. Understood. Thank you. I'll jump back in the queue. Good luck. Thanks, Ketan. Thanks, Kelly. Please stand by for the next question. The next question comes from Michael Roxland with Truist Securities. Your line is open. Thank you. Thanks, Nate, Kelly. Mike, congrats on the very good quarter. Thank you, Mike. Good morning. Morning. Morning. one quick question just for you on the margin profile in BMD. I think you mentioned on this call, you mentioned last call, you're reorienting the mix there. If you look at your performance this quarter, particularly given where housing was, particularly impressive. I'm wondering if you could help us frame where do you think EBITDA margins could hopefully wind up in BMD? Yeah. Good question, Mike. The business, you know, has done a really good job in margin performance in an environment here in the first quarter where really no opportunity to expand margins in commodities, and then we continue to execute well for our vendor and customer partners on general line and EWP. The question in terms of where do we go from here, you know, it's, you know, we've been on record now for at least several quarters of reminding folks that historically we were in, you know, kind of the 3%-3.5% range in that business. I think, you know, going forward, you know, we view that business as a, as a 4-plus% business. You know, again, as we look to continue to grow the EWP and grow the general line portion of the business that runs through BMD, that will allow us to expand those margins compared to what they were historically. Mike, it's Nate. Maybe just one other comment on that. Just that again, to I think the earlier discussion around out-of-warehouse services, you know, in terms of how that's gonna show up, certainly in 2023, and we think probably even into next year. Again, as customers manage that risk reward in terms of both volume and price, I think their dependency out-of-warehouse will continue to be there. You know, margin profile, as you might expect on units and job packs and pieces is different than, you know, kind of direct trucks and cars. I think that's gonna be a tailwind, continue to be a tailwind, you know, for BMD as we move forward through 2023 as well. Got it. Would it be fair to say it's a 4%, and there's definitely more upside to be had. I mean, it could be given your execution thus far, I mean, you could be looking at an EBITDA margin that I go forward that levels off at least 4.5%-5% and grows from there, given the mix shift and given what you just mentioned, Nate, in terms of other products that you're bringing on that have a higher margin profile. Yeah. We're certainly focused on execution and looking to maximize our margin and grow our earnings and earnings stability. Yeah, your thought process there and relative to what we wanna do to the business, yeah, that's a fair statement, that's a fair sentiment, and that is how we think. That's how, Mike, to your question, that's how we've invested as well. I mean, in terms of, you know, areas of focus and growth and prioritization, you know, it does, again, always starts with the customer and our supplier base, but in terms of, you know, like in that margin profile and the consistency and how do we elevate that, you know, that is very much part of our discussion on a day in and day out basis. Again, how we think, you know, long term in terms of our investments as well. Got it. No, I forget the color. Then just quickly on EWP. Obviously, you think prices are gonna continue to erode in 2Q, although they will be sequentially better. Can you just talk about maybe your operating stance, and the broader industry operating posture? Just wanna get a sense of whether, you know, if downtime as well, I don't know, additional downtime, this amount of downtime could help minimize EWP price resistance. Maybe let me take the pricing question, make sure clarify what we said there, and then I'll let Mike kind of take the operating stance. Yeah, what we've said there in terms of forward pricing, we are experiencing pressure still. As far as we've gone out in terms of giving some guidance is just sequentially second quarter versus first, which we do expect further price declines, but at lower rates of decline than what we just experienced sequentially. We haven't shadowed anything beyond that. You know, the marketplace is pretty fluid, and it'll be very dependent upon housing starts and operating rates, et cetera. Mike, you wanna take the operating stance question, please? Sure. Mike, as it relates to Boise's operating posture for EWP at the moment, which also sort of rolls over into how we operate our plywood or veneer producing facilities. I think it's fair to say that at pretty much every location, we're not running at full capacity and haven't done so now since fourth quarter of last year. There's ample upside in terms of capacity to produce more veneer and more EWP should the market demand present itself. Thank goodness, during the first quarter, you've seen by our numbers, we had a bit of a uptick. As and when necessary, we can start to add additional shifts or days in several different locations to produce more EWP and veneer as required. Geographically speaking, I would say that the Pacific Northwest has been a little bit more challenged than the Southeastern United States. As a result, there's been, I would say as a, as a general statement, more curtailments for us in the Pacific Northwest, as compared to the Southeast. I really can't give you a lot of good insight into the industry. I think most of the industry is probably looking at it in a similar vein as it relates to it's all about demand. I suspect, you know, if there was more demand, they would do sort of similar things to what we have been doing and what we would do. That's about as much as I can tell you about the industry. Gotcha. Just one quick follow-up, and I appreciate the comment. Can you just provide some more details around why the Pacific Northwest was more challenged than the Southeast? yeah. Demand. Simple as that. Yep. Yeah. You know, it's not funny, but in any stretch of imagination. The weather that we have experienced in the Pacific Northwest seems to just. It won't quit. California's been under water. We've had record snow here and everywhere, and it's very difficult to build houses, and particularly in the state of California, but not only because of the weather. They have very, very, very stringent requirements around what you can and can't do. We haven't really got to spring yet in the Pacific Northwest. In the Southeast, again, it's not been perfect, but they've had a better run. You can sort of see that when we look at our order files, particularly for EWP. I mean, they have been significantly stronger in the Southeast relative to the Pacific Northwest. Got it. Thanks very much for all the color and good luck in 2Q. Yeah. Thank you. Thanks, bye. Please stand by for the next question. The last question comes from George Staphos, Bank of America Securities. Your line is now open. Hi, everyone. Thanks for taking me at the, at the end here for a follow-on. Two quick ones. One, can you remind us what you think normal CapEx would look like for Boise Cascade once you're done with the expansion? Recognizing that you intend to grow, and so from that normal level, there'll be, you know, growth thereafter. You know, in a couple of years, what might CapEx look like, whatever the interval that you would say would be. Secondly, back to repair and remodel. You know, we know all the stories, all the facts behind why repair and remodel models favor over time. We have an aging housing stock. People are locked in with rates and so on. On the ground, are your customers truly thinking that that will be the case with, you know, the state of the consumer, the state of rates? What are they telling you in terms of their outlook for repair and modeled units over the next year or so, given some of those constraints and recognizing fully, you know, what the secular positives are? Thanks, guys, and good luck in the quarter. You bet, George. Thank you. I'll take the first one, then I'll pass off the second one. Yeah, the first one around kind of what's our normalized capital spending levels here going forward. It's a great question, and we actually had a good dialogue on that exact topic just a day or two ago with our board of directors. Several... Couple things to factor into the equation there. One, yes, we have grown. We have added operations in both Wood Products and in BMD. Inflation has definitely impacted that equation also. You know, I would tell you know, it wasn't, but a few years ago, we probably thought of our kind of normalized CapEx that included maybe a little bit of strategic in it, was probably, you know, in the $80 million-$90 million range as a company. I would tell you now, we're probably thinking more like $115 million-$120 million on a normalized basis going forward. Again, that's. You know, we have more facilities to support, and we're going to support them. We have higher costs because of inflation. If you think about, you know, just kind of the rolling stock requirements in BMD and the more facilities, more trucks, more trailers, more Hysters, all that kind of factors into that nucleus. If you pay back to the $115, it's probably something like $65 million in wood and $50 million for BMD. The RNR question, I think Jeff will start on that one. Yeah. George, it's Jeff. On the RNR question, I'll tell you, we're still seeing very good takeaway on that front right there. The pros are busy, but probably not to the same level they were during COVID, but they're still busy. We really expect the do-it-yourself part is gonna pick up with the seasonality and with the pricing. What are the customers saying? They still feel good. There's a lot of work to still be done out there. Some things got put off 'cause you couldn't get labor or pricing material was too expensive, and those projects are coming forward. The feeling out there from the customers of that segment is still gonna continue to be strong for a while. Okay. I appreciate the thoughts on both questions and, really for the call. Have a great rest of the day and great quarter, guys. Thank you. Thanks, George. Thank you, George. Please stand by for one more question. The question comes from Kurt Yinger, D.A. Davidson. Your line is now open. Great. Thanks. Appreciate you squeezing one more in. I just wanted to go back to George's earlier question on trend and EWP margins because it is a really interesting one, and I don't wanna put words in your mouth, but if you look at the historical margin profile of Wood Products with EWP encompassed within that, I think there's an argument that they've kind of underperformed relative to the fact that EWP is a list price product. You have a captive relationship with distribution, consolidated number of manufacturers, and there is a relationship and partnership with the end user. I guess at a high level, would you kind of agree with that view? Any thoughts around just the evolution of the category and the margin profile over time? That's a very interesting question. I guess my broad answer to this is that within the EWP category, there are a variety of different approaches to go to market. We have a particular approach, and we have a excellent set of distribution and dealer partners, and we work in conjunction with, you know, all the biggest and best builders in the country. When I think about your sort of question is, has it underperformed? No, I don't think it's underperformed really at all. I just think that ultimately, the margin is determined by what the market will bear. In certain circumstances, there is, I'll say, ample availability of product. As a result, that can end up seeing a compression of margins generally across all manufacturers of EWP. In other market circumstances, the reverse is true. There's not enough supply and margin expands. I wouldn't support the thesis that EWP margins haven't performed as certainly as I would have expected or that they have disappointed. I think that's just the way the market works. I think Nate would have some views on this, too. Yeah, Kurt, it's Nate. Just to, maybe to echo Mike's points and maybe just a couple others, as I think about the EWP business and the franchise, ultimately, it's a product category that solves problem for the builder in terms of its design, capabilities and functionality and flexibility. That continues to be really important. I think the other thing that the builders have been insistent on, and rightly so, is cycle times. How do they take time out of the construction cycle? And EWP is very much part of that equation and helps drive that. As I think about, you know, today and moving forward in terms of the relevance of EWP, including the supply and demand balance, I feel good about, you know, how that category is set up, and that really speaks to our investment as an organization, as a company in terms of continuing to grow that important franchise. Yeah, again, time will tell here as we go through the course of the year and what the housing start environment will be, especially on single family. Again, we feel really good about that franchise as we go through the course of this year and next year, and we're investing in and building our capabilities as a result. Okay. All right. I appreciate the thoughts, guys. Thank you. Thanks, sir. I show no further questions at this time. I would now like to turn the call back to Nate Jorgensen for closing remarks. Thanks, Michelle. We appreciate everyone joining us on the call today and for our update, and thank you for your continued interest and support of Boise Cascade. Please be safe and be well. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.