Boise Cascade, one of the leading companies in the lumber and building materials sector, reported a downturn in its financial performance for the fourth quarter and the full year of 2023. The company's fourth-quarter net income fell to $97.5 million, a 17% decrease from the $117.36 million seen in the same period the previous year. Over the full year, net income plummeted by 44%, from $857.66 million in 2022 to $483.7 million in 2023, reflecting significant market challenges.
Despite the earnings decline, Boise Cascade saw a slight uptick in sales during the fourth quarter, with revenues climbing 1% year-over-year to $1.64 billion. However, the annual sales narrative painted a grimmer picture, with an 18% drop to $6.8 billion from the previous year's $8.39 billion. The company attributed the mixed results to fluctuating market conditions and operational headwinds.
The Wood Products segment displayed a degree of resilience, marking a 6% increase in fourth-quarter sales to $449.7 million. Yet, on an annual basis, the segment's sales receded by 9%, and both income and EBITDA suffered significant declines, highlighting the pressures faced in the lumber market. The decrease in segment income was due primarily to lower EWP and plywood sales prices, accelerated depreciation of $6.2 million for the previously announced indefinite curtailment of lumber production at our Chapman, Alabama facility, and an increase in other manufacturing costs. These decreases in segment income were offset partially by higher EWP sales volumes and lower wood fiber costs.
In contrast, the Building Materials Distribution (BMD) segment witnessed a 3% sales increase in the last quarter of 2023, reaching $1.49 billion. Despite this, the annual perspective revealed a sharp 19% fall in sales, coupled with a 46% drop in income and a 44% decrease in EBITDA, underscoring the broader challenges within the building materials distribution landscape. The decrease in segment income was due primarily to lower plywood and EWP sales prices, as well as lower EWP sales volumes. In addition, segment income was negatively impacted by an increase in depreciation and amortization expense related to the Coastal Plywood acquisition and accelerated depreciation on lumber production assets, as mentioned above. These decreases in segment income were offset partially by lower wood fiber costs and higher plywood sales volumes.
Looking ahead, Boise Cascade's outlook remains cautiously optimistic, closely tied to the residential construction sector's health, particularly new single-family construction. With U.S. housing starts expected to align with the 1.42 million reported in 2023, the company is banking on new residential construction to sustain demand for its products. However, the forecast for multi-family starts is tempered by rising capital costs and other market factors.
The home improvement sector, buoyed by the aging U.S. housing stock and high homeowner equity levels, is anticipated to maintain historical strength, albeit with a predicted mid-single-digit decline in 2024 due to economic uncertainties and increased borrowing costs.
