Boise Cascade Co (BCC) Q1 2019 Earnings Call Transcript

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Boise Cascade Co (BCC -0.20%)
Q1 2019 Earnings Call
May. 7, 2019, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning. (Operator Instructions) My name is Emily. and I will be your conference facilitator today. At this time, I'd like to welcome everyone to Boise Cascade First Quarter 2019 Conference Call. All lines have been placed on mute to prevent any back ground noise. After the speaker's remarks, there will be a question and answer period. (Operator Instructions) I remind you that this call may contain forward-looking statements about the company's future business prospects and anticipated financial performance. These statements are not guarantees of future performance and the company undertakes no duty to update them.

Although these statements reflect management's expectations today they are subject to a number of business risks and uncertainties. Actual results may differ materially from those expressed or implied in this call. For a discussion of the factors that may cause actual results to differ from the results anticipated. Please refer to Boise cascades recent filings with the SEC. It is now my pleasure to introduce you to Wayne Rancourt, Executive Vice President, CFO and Treasurer. Boise Cascade. Mr. Rancourt, you may begin your conference.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you, Emily. Good morning, everyone. I would like to welcome you to Boise Cascades First Quarter 2019 Earnings Call and Business Update. Joining me on today's call are Thomas Corrick, our CEO; Nate Jorgensen. Our Chief Operating Officer; Mike Brown, Head of our Wood Products operations; and Nick Stokes, Head of our Building Materials Distribution Operations. Turning to Slide 2, I would point out the information regarding our forward-looking statements, the appendix to the presentation includes reconciliations from our GAAP net income to EBIDTA and adjusted EBIDTA.

I will now turn the call over to Tom Corrick.

Thomas Corrick -- Chief Executive Officer

Thanks, Wayne. Good morning everyone. Thank you for joining us for our earnings call today. I'm on Slide 3. Our first quarter sales of 1 billion dollars were down 12% from the first quarter 2018. Our net income was $11.4 million or $0.29 per share down from 94 cents per share in the (inaudible) quarter. The first quarter results reflected weaker performances in both businesses. Total US housing starts declined approximately 10% compared to the same period last year. Single family starts. the primary driver of our sales decreased by 5%and multi-family starts decreased 19%. In particular single family housing starts in the Western United States reflected significant weakness with the Census Bureau reporting year-over-year declines in that region in excess of 20%.

Our wood products manufacturing business reported segment income of $11.6 six million in the first quarter compared to $46.1 million in the year-ago quarter. These results reflect lower plywood pricing and lower volumes of EWP and plywood, partially offset by higher EWP sales prices and lower OSP input costs. Depreciation and amortization was also lower due to the discontinued depreciation on manufacturing facilities curtailed and sold in 2015 (ph). Our building materials distribution business reported the segment income of $17.5 million by quarterly sales of $908 million for the first quarter compared to the $32.4 million dollars of segment income on quarterly sales of $992 million in the comparative prior-year quarter. Lower average commodity prices and sales volumes caused a decrease in gross margin dollars in the quarter.

On the strategic front, we successfully completed the previously announced acquisition of American lumber in Birmingham at the end of April. I want to welcome all the associates at American to Boise Cascade. They have a terrific reputation for customer service in their trade area and we are delighted to have them as part of our distribution group. Wayne will walk through the financial results in more detail and then I will come back to provide our outlook before we take your questions.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you, Tom. I'm on Slide 4. Wood products sales in the first quarter including sales to our distribution segment were 320 million down 20% from first quarter 2018. As Tom mentioned wood products reported segment income of $11.6 million in the first quarter. Reported EBITDA for the business was $25.4 million down from $43.7 million of EBIDTA reported in the year ago quarter.

The decrease in EBIDTA is due primarily to lower sales prices of plywood and lower sales volumes of EWP and plywood as well as higher per unit conversion costs. The per unit production costs were impacted by capital project related outages at our Cattle Falls Washington and Chester South Carolina Plywood Mills. Chester's partial production outage is expected to continue into early June of this year and negative earnings impacts were offset by partially higher or partially offset by higher EWP sales prices and lower OSB costs used in the manufacture of I-Joists. BMD sales in the quarter were $908 million, down 9% from the first quarter 2018; sales prices and sales volumes declined 6% and 3% respectively. Excluding the impact of last year's acquisitions the sales decline and BMD would have been approximately 11%.

BMD reported segment income of $17.5 million or EBIDTA of $22.6 million. This compares to segment income of 32.4 million and EBIDTA of 36.6 million in the prior year quarter. The decline in income was driven primarily by a gross margin decrease of $10 million resulting from lower average commodity prices and lower sales volumes compared with first quarter 2018 and a 4.1 million increase in selling and distribution expenses. The amounts for unallocated corporate costs and other items impacting our reported adjusted EBITDA can be found in the tables of our earnings release.

The net of those items was negative $7.3 million in first quarter 2019 compared with negative $6.8 million in first quarter 2018. Turning to Slide 5, our first quarter sales volumes for LVL and I-joists were 10% and 17% percent respectively compared with first quarter 2018. Our volume decline for EWP were roughly in line with industry production figures for the first quarter. So we believe that weaker volumes are reflective of the slow start for the building season this year. Pricing in first quarter for LVL and I-Joists was up 9% and 7% from the year ago quarter reflecting pricing actions taken in early 2018 and ongoing management of our customer programs.

Turning to Slide 6, our first quarter plywood sales volume and wood products was 336 million feet compared to 360 million feet in first quarter 2018, a lower volume for plywood sales reflects modest downtime in response to weaker market conditions and the sale of the (inaudible) plywood facility during the first quarter. The $287 average plywood net sales price in first quarter was down 19% percent from first quarter 2018; April 2019, plywood pricing was modestly lower than our first quarter 2019 average and current pricing remains more than 25 % below last year's second quarter average plywood price. Moving to Slide 7, BMD's first quarter sales were $908 million, down 9% from first quarter 2018. By product area, BMD sales and commodity products decreased (ph) 19%. General line products increased 3 % and EWP decreased less than 1%. The gross margin percentage for BMD in first quarter was 11.8% flat with first quarter 2018.

However, the gross margin dollars generated in first quarter 2019 were 10 million below the prior year quarter because of price deflation and lower volumes. BMD's EBIDTA margin was 2.5% for the quarter, down from 3,7% reported in the year ago quarter. With commodity pricing for lumber and structural panels currently well below second quarter 2018 levels, we expect price deflation and distribution to make for challenging revenue and earnings comparisons again in the second quarter. On Slide 8, we have set out the key elements of our working capital. Company net working capital excluding cash, income tax items, assets held for sale, and accrued interest increased $77.1 million during the first quarter representing a significant seasonal use of cash.

The seasonal increase in accounts receivable and inventories was not fully offset by the increase in accounts payable. As is normally the case, we also use cash to pay out incentive compensation and customer rebate accruals during the quarter, reducing accrued liabilities. The statistical information filed as Exhibit 99.2 to our 8-K has the receivables inventory and accounts payable data broken down by segment for those that are interested in more detail. I am now on Slide 9. We finished the first quarter with $136 million in cash or total available liquidity on March 31 was approximately 502 million, which reflects our cash balance and availability under our committed bank line.

Our capital spending excluding acquisitions is expected to be between 85 and 95 million this year as we execute strategic projects that our manufacturing operations and Chester, South Carolina, and (inaudible) Louisiana. Despite a lower tax rate this quarter, we continue to expect our effective tax rate to be approximately 26% percent going forward.

And I will now turn it back over to Tom to discuss our outlook.

Thomas Corrick -- Chief Executive Officer

Thanks Wayne. I am on slide 10. The April consensus for 2019 US housing starts is 1.25 million which is essentially flat with 2018. We believe important economic drivers behind the demand for new construction like job formation remain in place. However, affordability issues in many metropolitan areas, mortgage rate volatility, and the availability of construction labor are all influencing the pace of activity. While we believe housing starts can reaccelerate in the second half of the year, we are focusing on the areas we can control to drive both revenue and earnings improvement. The wood products we are focusing on successfully completing our strategic capital projects and achieving operational excellence to drive improved returns. For BMD, the team continues to make good progress on seeking acquisitions in targeted geographic markets, looking at product line extensions and pursuing other avenues drives sales and earnings.

We would welcome any questions at this time. Operator, would you please open the phone lines.

Operator -- Chief Executive Officer

Good morning. (Operator Instruction) My name is Emily and I will be your conference facilitator today. At this time I'd like to welcome everyone to Boise Cascade first quarter 2019 conference call. I remind you that this call may contain forward looking statements about the company's future business prospects and anticipated financial performance. These statements are not guarantees of future performance and the company undertakes no duty to update them.

Although these statements reflect management's expectations today they are subject to a number of business risks and uncertainties actual results may differ materially from those expressed or implied in this call. For a discussion of the factors that may cause actual results to differ from the results anticipated. Please refer to Boise cascades. Recent filings with the FTC. It is now my pleasure to introduce you Wayne. RAND Corp. executive president CFO and Treasurer Boise Cascade Mr. Rand Corp.. You may begin your call.

Thomas Corrick -- Chief Executive Officer

Thank you Emily. Good morning everyone. I would like to welcome you to Boise cascades first quarter 2019 earnings call business update. Joining me on today's call our work our CEO Nate Jorgensen. Our Chief Operating Officer Mike Brown head of our Wood Products operations. And Nick Stokes head of our building materials distribution operations. Turning to Slide 2 I would point out the information regarding our forward looking statements the appendix to the presentation includes reconciliations from our gap net income to even DHA and adjusted the DA.

I will now turn the call over to Tom for Thanks Wayne. Thanks Wayne. Good morning everyone. Thank you for joining us for our earnings call today. I'm on Slide 3. Our first quarter sales of 1 billion dollars were down 12 percent from the first quarter 2018. Our net income was eleven point four million dollars or twenty nine cents per share down from 94 cents per share in the quarter the first quarter results reflected weaker performances in both businesses total U.S. housing starts declined approximately 10 percent compared to the same period last year. Single family starts the primary driver of our sales decreased by 5 percent and multi-family staffs decreased 19 percent in particular single family housing starts in the western United States reflecting significant weakness with the census bureau reporting year over year declines in that region in excess of 20 percent.

Our wood products manufacturing business reported segment income of eleven point six million dollars in the first quarter compared to forty six point one million dollars in the year ago quarter. These results reflect lower plywood pricing lower volumes of AWP and plywood partially offset by higher AWP sales prices and lower ISP input costs. Depreciation and amortization was also lower due to the discontinued depreciation on manufacturing facilities curtailed and sold in 2016. Our building materials distribution business reported the segment income of seventeen point five million dollars. Quarterly sales of nine hundred eight million dollars for the first quarter compared to the thirty two point four million dollars of segment income on quarterly sales of nine hundred ninety two million dollars in the comparative prior year quarter lower average commodity prices and sales volumes caused a decrease in gross margin dollars in the quarter.

On the strategic front we successfully completed the previously announced acquisition of American lumber in Birmingham at the end of April. I want to welcome all the associates at American Boise Cascade. They have a terrific reputation for customer service in their trade area and we are delighted to have them as part of our distribution group. Wayne will walk through the financial results in more detail and then I will come back to provide our outlook. Before we take your questions.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you Tom. I'm on Slide 4. Wood products sales in the first quarter including sales to our Distribution segment were 320 million down 20 percent from first quarter 2018. As Tom mentioned wood products reported segment income of eleven point six million in the first quarter reported EBITDA for the business was twenty five point four million down from forty three point seven million people Todd reported in the year ago quarter.

The decrease in the dollar is due primarily to lower sales prices of plywood and lower sales volumes of AWP plywood as well as higher per unit conversion costs per unit production costs were impacted by capital project related outages at our cattle Falls Washington and Chester South Carolina plywood Mills Chester's partial production outage is expected to continue into early June of this year and negative earnings impacts were offset by partially higher or partially offset by hiring DCP sales prices and lower OSB costs used in the manufacture of a joint BMD sales in the quarter with 908 million down 9 percent from the first quarter 2013 sales prices and sales volumes declined 6 % and 3 % respectively excluding the impact of last year's acquisitions the sales decline and BMD would have been approximately 11 %.

The embassy reported segment income of seventeen point five million were either DA of twenty two point six million. This compares to segment income of thirty two point four million and about thirty six point six million in the prior year quarter. The decline in income was driven primarily by a gross margin decrease of 10 million dollars resulting from lower average commodity prices and lower sales volumes compared with first quarter 2013 and a four point one million increase in selling and distribution expenses. The amounts for unallocated corporate costs and other items impacting our reported adjusted EBITDA can be found in the tables of our earnings release.

The net of those items was negative seven point three million in first quarter 2019 compared with negative six point eight million in first quarter 2018. Turning to Slide 5 our first quarter sales volumes for LTL and Joyce were down 10 percent and 17 percent respectively compared with first quarter 2013 our volume decline for AWP were roughly in line with industry production figures for the first quarter. So we believe that weaker volumes are reflective of the slow start for the building season this year. Pricing in first quarter for LTL and Joyce was up 9 percent and 7 percent from the year ago quarter reflecting pricing actions taken in early 2013 and ongoing management of our customer programs.

Turning to Slide 6 our first quarter plywood sales volume and wood products was three hundred and thirty six million feet compared to three hundred and sixty million feet in first quarter 2013 a lower volume for plywood sales reflects modest downtime in response to weaker market conditions and the sale of the monster plywood facility during the first quarter. The two hundred eighty seven dollar average plywood net sales price in first quarter was down 19 percent from first quarter 2013 April 2019. Plywood pricing was modestly lower than our first quarter 2019 average and current pricing remains more than 25 % below last year's second quarter average pilot price moving to Slide 7 BMD first quarter sales were nine hundred and eight million down nine percent from first quarter 2008 team by product area BMD sales and commodity products produced 19 % general line products increased 3 % and WP decreased less than 1 % the gross margin percentage for BMD in first quarter was eleven point eight percent flat with first quarter 2008.

However the gross margin dollars generated in first quarter 2019 were 10 million below the prior year quarter because of price deflation and lower volumes BMD either. The margin was 2.5 percent for the quarter down from three point seven percent reported in the year ago quarter. With commodity pricing for lumber and structural panels currently well below second quarter 2013 levels we expect price deflation and distribution to make for challenging revenue and earnings comparisons again in the second quarter. On Slide 8 we have set out the key elements of our working capital company net working capital excluding cash income tax items assets held for sale and accrued interest increased seventy seven point one million during the first quarter representing a significant seasonal use of cash.

The seasonal increase in accounts receivable and inventories was not fully offset by the increase in accounts payable. As is normally the case we also use cash to pay out incentive compensation and customer rebate accruals during the quarter reducing accrued liabilities. This statistical information filed as Exhibit ninety nine point two to our 8-K has the receivables inventory and accounts payable data broken down by segment. For those that are interested in more detail I am now on Slide 9. We finished the first quarter with one hundred and thirty six million of cash or total available liquidity. March 31 was approximately five hundred and two million which reflects our cash balance and availability under our committed bank line.

Our capital spending excluding acquisitions is expected to be between 85 and 95 million this year as we execute strategic projects that our manufacturing operations and trust for South Carolina and flooring Louisiana. Despite a lower tax rate this quarter we continue to expect our effective tax rate to be approximately 26 percent going forward and will now turn it back over to Tom to discuss our outlook.

Thomas Corrick -- Chief Executive Officer

Thanks Wayne. I am on slide 10. The April consensus for 2019 U.S. housing starts is one point two five million which is essentially flat with 2018. We believe important economic drivers behind the demand for new construction like job formation remain in place. However affordability issues in many metropolitan areas. Mortgage rate volatility and the availability of construction labor are all influencing the pace of activity. While we believe housing starts can reaccelerate in the second half of the year we are focusing on the areas we can control to drive both revenue and earnings improvement. The wood products we are focusing on successfully completing our strategic capital projects and achieving operational excellence to drive improved returns for BMD. The team continues to make good progress on seeking acquisitions in targeted geographic markets. Looking at product line extensions and pursuing other avenues drives sales and earnings.

We would welcome any questions at this time. Operator would you please open the phone lines.

Questions and Answers:

Operator

Our first question comes from the line of George baseballs with Bank of America. Your line is open.

George Baseballs -- Bank of America -- Analyst

Good morning. How are you doing. Thanks for the details. I guess the first question that I had. Can you to the extent possible talk about what amount of downtime you took across your facilities in EWP and in plywood, you know, either in units or qualitative terms. And I know it's kind of hard to talk about downtime on a forward looking-basis but any thoughts that you could share with us on that. That would be helpful when I had a couple of follow on.

Mike Brown -- Executive Vice President

Yeah. This is Mike Brown. I can take a stab at that, George.

George Baseballs -- Bank of America -- Analyst

Hi, Mike. How are you doing?

Mike Brown -- Executive Vice President

So, there there really hasn't been any what I'd call either market or capital related downtime in our EWP business; the way we run that part of the business is obviously related to the market demand that we experienced during one time. On the plywood side, we have had some significant downtime in the latter part of last year and the first part of this year, primarily related to the Pacific Northwest; it was weather related; and some market related downtime in total that may have amounted to a couple of weeks worth of equivalent production in the in the South or the Southeast. I think you're aware we've had a pretty significant capital project that's been ongoing now at the Chester Plywood Facility, that started in late February, and in total will run for about 12 or 13 weeks.

And so at the Chester Plywood Facility that's going to represent a reduction in about 40% of the output for about (inaudible) 12 weeks. So there has been some reasonably significant amount of downtime primarily related to the weather; a little bit of market primarily in the Pacific Northwest; and then the capital project in the East.

George Baseballs -- Bank of America -- Analyst

Thanks for that. And then if we consider Chester as well as Florien what other strategic capital projects might you have ahead that would be required as you know kind of go for whatever the market is ahead going forward.

Mike Brown -- Executive Vice President

Yeah. Looking forward. George, as it relates to the Chester project here as I think Wayne mentioned that will come to a conclusion and start the ramp up phase in late late May. And by the end of the quarter, I think we'll be at full speed of Chester as relates to Florien that's a very big project. It really spans 18 months to two years, and in total, we're going to have I think a week or two this year at the very very most but it won't be in one concentrated event, sort of we're going to take extended downtime as relates to maintenance days, maybe an additional day here and then around the holidays and then we'll do the same thing again in 2020 when we start the ramp up with that new log utilization center. So the impact on Florien total volume this year is going to be relatively negligible to be honest. We're going to try and minimize that as much as possible, and are after those off those two projects, we really don't have any really major outages planned at this stage.

George Baseballs -- Bank of America -- Analyst

Thank you. And then my last question and I'll turn it over. Can you talk about what effect you're seeing or what you're seeing toward the end of the quarter in terms of imports of plywood into the market. The data is obviously reported at LAX it's kind of hard to say what's happening near term, but are we seeing much effect at this juncture or is that a pickup in economic activity. Insufficient to absorb a lot of the supply that would've been coming out of South America, otherwise.

Mike Brown -- Executive Vice President

Thank you. Well I can have a status, (ph) so can nick I guess from from the manufacturing perspective, the low pricing that they're willing to accept coming in from South America sort of set them the low bar in the market. And the last time I looked at the data was which was comparing first quarter this year to first quarter last year the total volume that has come in from Brazil was essentially equivalent. So not quite significant that equivalent. Maybe Nick you'd like to make some comments around how you seeing it from DMD side.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Let me jump in for a second. Jorge exports out of Brazil just to give you some numbers for the first part of the year we were just below 35,000 cubic meters in January; 56.5 in February, March had jumped up to 82,000, meters. And the data we just got in for April would say that there was 81000 cubic meters that left Brazil bound for the US. So in total right now, year-to-date the US has received about 34 percent of the exports from Brazil. And if you contrast that with the year ago Brazil exported just over 90,000, cubic meters in April to the US and for the full year last year we got 33 percent of Brazil's exports. So not a huge change in the overall volume from Brazil, but it still represents significant capacity particularly along the eastern seaboard.

George Staphos -- Bank of America -- Analyst

Thank you, Wayne. I'll turn it over.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Thanks, George.

Operator

Your next question comes from the line of Brian Maguire with Goldman Sachs.Your line is open.

Brian Maguire -- Goldman Sachs. -- Analyst

Hey good morning is Derek Leighton for Brian Burke

Good morning, Derek.

Hey, thanks for the details on the pricing. Kind of where we stand now relative to 1Q, and it does look like since the first quarter ended at least that the moderation in the declines that we've seen so far. Do you think there's any any further outages that are needed in the industry for us to start really seeing any upward momentum in plywood pricing and just maybe you could give us some sense of what you're seeing right now in terms of supply and demand in the market.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Mike, Do you want me to take a shot at that or--

Yeah, I think we have to (inaudible). Wayne, if you would like to take a shot at the supply demand balance(inaudible).

Yeah, on plywood, I think supply and demand are reasonably balanced but I would tell you there's not a lot of lead time issues if you're a buyer and I think as opposed to 17 or 18 or plywood prices we're getting a lot of support from the lack of OSB in the market that has swung 180 degrees and there's plenty OSB around and the price differential plywood is quite wide. Our view right now is that there is a limited amount of downtime taking place across the market and we suspect that there's a number of producers that are operating close to cash cost, so in terms of pricing for here on plywood I think a lot of it will be driven if we get any pickups in industrial or repair and remodel activity. I don't see changes in housing demand or construction driving a lot of the plywood behavior. I think we're back to the fundamentals where we've got specific homebuilding markets that have a preference for plywood.

But I think what you're seeing on downtime and I'm pricing on plywood is very much driven by plywood fundamentals and the cost position across the industry. And we like others I think are managing our production border cash margins. and otherwise I think to Mike's earlier comment we will use downtime as a mechanism where appropriate if we don't have orders or if we're finding ourselves running cash out of pocket at times.I would this is fun. I would add that you know fundamentally until we see a material rebound in OSB pricing I don't think we're expecting any material upward movement in with prices kind of.

Brian Maguire -- Goldman Sachs. -- Analyst

Thanks guys. And then maybe just get your sense for plywood inventories in the channel and we start to see that clear out at all or maybe any change there in the last few weeks.

Nick Stokes -- Executive Vice President, Building Materials Distribution

Brian, this is Nick Stokes. Good morning. I think firewood inventories are for very similar to some of the other commodity products. As you know, there's not a lot of data around that but in conversations with customers and observations from conversations with suppliers we have a belief that inventories are sufficient maybe on the false side across all those product lines.

Brian Maguire -- Goldman Sachs. -- Analyst

Got it. That's helpful. Thank you, guys.

Thanks, Derek

Operator

Thanks. Your next question comes from the line of Mark Wilde with BMO Capital Markets. Your line is open.

Mark Wilde -- BMO Capital Markets -- Analyst

Well, Nick, you just answered one of my questions right there on the supply and the distribution channel sounds like there is plenty of inventory out there.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah I think you you've articulated fine, Mark. I mean, certainly a different dynamic than a year ago and Wayne's earlier comment from a buyer standpoint there's plenty of availability.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay. Is it possible for you guys to give us a sense of what you've seen so far in the second quarter in terms of April activity.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

I think it's been decent. Mark we're continuing to see some weather disruptions mostly around rain and flooding but I think where things are drying out the activity levels picking back up. I think the biggest question we have as we move through spring and into summer as there's a pretty decent backlog of builder activity and activity at the retail lumber yard level but our view is that we're not going to be able to catch up on some of the weather delays that occurred in the first quarter just because of labor availability and the constraints around job site construction. So we think that the pace of those is decent in April and going into May and June but we're not looking for an absence of a (inaudible) %pickup in activity just because we don't think the labor availability is there to to allow some stubble build and make up some of the deficits that occurred in the first quarter.

Mark Wilde -- BMO Capital Markets -- Analyst

OK.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

But Mark this is Tom I would add the pace certainly feels better today the last 40 45 50 days has felt more normal than what we saw for the first two and a half months of the year which was pretty slow for a whole bunch of reasons.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay. And then just turning to the engineered wood business I'm just curious you know pricing has been good there but we're seeing costs come down. The man's been fairly static and were conscious of a new competitor moving into the southeast next year. I'd just like to get your general thoughts on maintaining EWP prices against that backdrop.

Nate Jorgensen -- Chief Operating Officer

So Mark, it's Jorgenson Morgenson. Yea, specific to EWP, pricing what we're experiencing today is a pretty good balance in terms of demand and supply across most markets, so we are expecting any real change in terms of pricing as we go through the balance of this year relative to the new capacity coming on later this year or at some point next year, really not a lot of discussion in the marketplace around that. So I think as we look at the balance of this year we feel supply and demand are need to in pretty good balance, and as a result, pricing should reflect that OK.

Mark Wilde -- BMO Capital Markets -- Analyst

All right. And then the last thing for either Wayne or Tom, it just seems anecdotally when I kind of keep an eye on the trade press that maybe there's been a pickup in building products distribution M&A in recent quarters. You know, and I wonder, you know, if you would agree with that if we're seeing kind of more consolidation taking place and distribution and maybe also get some thoughts on just sort of valuations on distribution businesses.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Mark, I'll take a shot at. My sense is part of what's going on certainly in the transactions that we've worked on. It's been driven partially by consolidation, but I would tell you more than anything it's been driven by people with succession planning and looking at their time horizon and I think the slowdown in the back half of '18 may have reminded people of what the last slowdown looked like. You know valuations are probably haven't changed a lot but I think in terms of the expectation that we're going to get back to a 1.4 or 1.5 housing starts and that there's substantial runway from here forward. I think some people will, you know, with decade sense of recovery really started, I think some of them are aging into their 60s or 70s and concluding that this is a good time to do an orderly handoff of their business.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay. Alright. That's helpful. Wayne, I will turn it over.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Thanks, Mark.

Operator

Your next question comes from the line of Jeff Skilling with Vertical Research. Your line is open.

Chip Dillon -- Vertical Research -- Analyst

Hey, good morning, everyone. First question has to do with just maybe review where you stand in terms of your footprint. I know that both in plywood and lumber you've you've shed some assets in the last year or so and are you pretty much done with that program or do you think there could be more to go either in distribution or especially in wood products.

Thomas Corrick -- Chief Executive Officer

Chip, if I am correct, I think that you know we went through a fairly diligent process of structured process last ) year as we've tried to address some of these opportunities related to non core assets or assets that were challenged, but (inaudible) and actually you know I would say that at this point I don't think there's anything material on the horizon that we'd be looking at in either business.

Chip Dillon -- Vertical Research -- Analyst

Okay, OK. That's helpful. And then if you could review for us in engineered wood both LVL and I-Joist, when was your last price increase and is there anything going on in the marketplace and pricing that -- you know I would imagine that as lumber has stayed soft that it would have more of a volume impact and a price impact. But any help along those lines would be would be appreciated.

Nate Jorgensen -- Chief Operating Officer

Hey, Chip. It's Nate Jorgensen, so on the EWP pricing so that announcement that we had on our last price increase was January of 2018. And so in terms of pricing expectations kind of going forward again. I think things are in relative balance it's work even though some of the raw material prices may have have been lowered. In terms of the overall marketplace again that despite the (inaudible) in relatively good balance. So that's kind of what we're expecting to see for the balance of certainly the building season and for this year. And again we would expect pricing to reflect that.

Thomas Corrick -- Chief Executive Officer

Yeah, Chip, This way and let me add in a couple of points. The engineered wood for us and certainly for our larger competitors is a less price business. A lot of long term relationships and a huge service component down through the supply chain including obviously the wholesale alignment internally with Boise Cascade and down through the retail lumber yards.

So if your recall the strong run in OSB and in lumber a year ago, we we did not raise prices in EWP in response to input costs. It's much more on the supply and demand and what's going on with EWP, so we weren't able to maintain margins on the way up on lumber and OSB a year ago and likewise we're not retreating on this price simply because input costs have changed. The other thing is we mentioned this morning the major downdraft in single family starts in the West this year relative to early '18.

And if you look at I-Joist or (inaudible); they're typically used in raise floor and in two story situations, particularly in our case. So where you've got a disproportionate amount of construction going on in the U.S. South/Southeast where there's a lot of slab on grade and in certain cases single story activity, you get less I-Joist consumption because you have fewer race horse.

Chip Dillon -- Vertical Research -- Analyst

That's helpful. And then lastly as you look at that your mill system and you think about CapEx next year, and I know it's early, but at least directionally, do you see it more likely to be flat, up or down next year versus this year. You know assuming you don't make an acquisition a big acquisition.

Thomas Corrick -- Chief Executive Officer

I think CapEx will be relatively flat; it may come down modestly, the major projects that we'll have going in 2020 is the completion of the log utilization center at Florien.

As Mike said that's really about an 18-month project that will start later this year in (ph) Ernest and carry into 2020, but we'll be through the project at Chester, you know BMD's capital requirements outside acquisitions are going to be reasonably flat. And then once we get toward the latter part of '20 and into '21; right now there's no substantial projects identified in wood. So I would expect it to drop back down to the 75 to 85 level.

Chip Dillon -- Vertical Research -- Analyst

Great. Thank you.

Thomas Corrick -- Chief Executive Officer

Thanks, Chip.

Operator

Our next question comes from the line of Curt younger with Davidson. Your line is open.

Curt younger -- Davidson -- Analyst

Good morning, everyone and thanks for taking my questions.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Good Morning, Curt.

Curt younger -- Davidson -- Analyst

Yeah, thanks. Just starting off, I was hoping you guys can maybe give some color as to margins in the western plywood operations and understanding. You might not want to get into too many details, maybe just kind of talk about it relative to what you're generating in the south.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Let's me do this, and then Mike you can add in. I think it's safe to assume that given our product mix in Western Oregon which is really using residual veneers that we don't take an engineered wood to make on a relative basis commodity type panels that would not be a fun product mix if you were a stand-alone plywood producer. If you're producing plywood in Western Oregon or Western Washington, you really need to do a high value product just given the relative low cost and and that is not what we're doing we're taking the higher value veneer and putting in the EWP if you were to look at our mill in Northeast Washington in Kettle Falls.

It's exceedingly low cost, has very good throughput, and we've got decent cash margins in Kettle Falls today and even at the pricing we have. But but again if you were running a commodity plywood mill in Western Oregon, given log costs you would not like the outcome which is why a lot of the plywood industry that's running commodities is located in the US South.

Thomas Corrick -- Chief Executive Officer

Gotcha. No that makes sense and I mean just taking it a step further I mean there's obviously kind of a common thread between what's going on in the lumber side between some of the curtailments and closures and what you just reference and I'm I'm sort of wondering whether your expectation would be that over time you know you might actually expect capacity to come off line in the West or whether you think prices right now are sort of subdued and that.People will kind of wait it out.

Curt younger -- Davidson -- Analyst

Thank you God. Go ahead Michael. I got it. We thought we'd have similar views about how this is going to work.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah I think again if you look at late 16 through 17 and into the early half of 18 I think the plywood industry in general got a bit of a reprieve given the shortages we had no SB. So you know for a number of decades we've seen substitution of OSB for plywood and I think given the capacity overhang and OSB at the moment you will see a number of OSB players trying to make a push into more value added parts and industrial. And I would suspect we will continue to see modest structural decline in plywood where the attributes of OSB work and are reasonably substitute of all the cost of OSB is lower. So I think not unlike the GOP announcement that occurred late in 18 I would expect that if we see one costs where they are product pricing where it is and if LSP continues to be at a discount I think you will see capacity removals imply would take place in 19 and 20 on some kind of reasonable pace.

And I think you'll see ongoing substitution for OSB into some of those end users as they make progress on the product development and the other thing I would throughout their third is that the log.The other thing I would throw out there Curt is that you know the log buying process is very much tied to the product price environment and we obviously purchased logs in advance as well as logs at the gate. And so it takes time to balance out the cost of our log inputs. Back to the market. But certainly over some period of time lower cost producers can get back into a position where they'll generate some margin simply by reflected by the fact they can buy logs cheaper when the market's soft.

Curt younger -- Davidson -- Analyst

Thanks. And that's helpful color. And then one for Nick I know you touched on it a little bit earlier but I was hoping you could talk about maybe the demand pull you're seeing from the dealers and the home improvement channel and whether there's a big disparity there or if anything's kind of surprised you about actions or activity in the market over the last couple months.

Nick Stokes -- Executive Vice President, Building Materials Distribution

I think the way I think about that Curt is the home said our business for the last certainly in the first quarter had a little more stability to it as you well know home center business on the products that were involved with him have a large seasonal component particularly as they as they start to ramp up. Mark April some of the building season related to projects and we've seen a nice Dwayne's earlier point we've seen a nice increase in those kinds of dynamics. I think from a dealer standpoint if you contrast the first quarter of nineteen against the first quarter of 18 very different dynamics in terms of price escalation weather related mill related supply challenges certainly housing starts activity in certain parts of the region and 19. And I think dealers just behave irrationally in terms of match and their purchases to their demand and their in their forecasts. So your last question have I seen anything weird or unusual no weird or no one more unusual than any other year or so it's kind of steady as she goes Okay.

Curt younger -- Davidson -- Analyst

Thanks Nick. And lastly I was just hoping you might talk about how you're thinking about your cash balance this year and where ideally you think that would stand. Just given your available debt capacity as well.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah so on kind of what we think of as capital allocation. First priority obviously is to fund the eighty five point ninety five million we've got for internal capital toward growth and operational improvements Nick and his team continue to look for tuck in acquisitions not dissimilar to what we just closed on the Birmingham Alabama opportunity. We've obviously got the regular dividend at 9 cents a quarter. And to your point we feel very good on where our debt levels are relative to our ideas on and certainly relative to our cash balances.

So really the question is if we don't find good opportunities in distribution or adjacent opportunities on the manufacturing side we will look at some combination likelihood of share repurchases and or other ways of returning cash to shareholders. If the balance sheet is in good shape but we're comfortable running with 120 maybe a hundred and fifty in cash and if we get meaningfully above the 150 number we're probably going to look at various ways of getting cash back to shareholders just because we think it's inefficient from a return on capital to sit on unacceptable liquidity. But our preference would be to grow the business if we can find the right opportunities.And I would note there is at least a couple of things we're aware of that will be coming at us and whether we do anything or not I don't know. But certainly I think for the balance over the next several months with Will we'll be in pretty pretty steady state position as we look at these potential acquisitions.

Curt younger -- Davidson -- Analyst

Great. Thanks Wayne.

Operator

Your next question comes from the line of George Spaceballs with Bank of America. Your line is open.

George Staphos -- Bank of America -- Analyst

Hi everyone. Thanks for taking the follow on. Tom when you talk with your builder customers what do they say whether took away from demand this year or said differently if we could hold the same economic growth the same wage level and all the other fun metal that go into housing. What kind of demand pickup could we see in 20 relative to 19 I know that's a really hard question I'm not going to hold you to it but what are your customers saying was lost it could potentially come back next year.

Thomas Corrick -- Chief Executive Officer

Yeah I think I'm going to hand that one over today. George is a little closer to the market than I am on a day to day basis and certainly had some impact that made if you could provide some color. So I think if you look at kind of the fundamentals of most homebuilders as we exited 2018 obviously there was a lot of headwind relative to cost of money some concerns in terms of the economy. And I think as they transitioned into the early part of this year and including feedback from the International Builders Show I think there was a right level of optimism in terms of what was in front of them. And obviously the challenges at that point in time were largely weather related.

The feedback that we get from from the builders ranging from the custom builder to the national builder and some of it is geographically based in terms of kind of local economies and local trends. Sure. But there is a belief that housing should continue to improve. And I think one of the things that we continue to hear from builders is that affordability is a key driver in terms of what that demand will look like. And so they are attacking that in various ways including the size of the average square foot for single family construction. The continued focus on multi-family construction as well so. So I think the conditions overall from an economy and from unemployment cost the money those are all I think are quite favorable but it's clear that the builders that we talked to are they continue to be focused on affordability and making sure that you know that first time home or homeowner can can actually get into the get into the home. So I guess where we see continued opportunity and housing start improvement is again as long as those conditions remain in place.

But there isn't a common denominator or view from your from your customers in terms of what what amount of volume was lost this year that will return next year. But it was lost due to weather and other disruptions. And if that's the case that's fine I just want to confirm that yeah.

I think the way I would describe it George is if we were at a million to 50 million to 60 a year ago, I think we will be challenged to hit that based on what we're hearing from our customers in 19 not because demand will be weak in the back half of the year but just trying to catch up with the volume that we've lost in the front half of the year.

Having said that I think we'll see we'll be on a build pace that's in the million to 80 plus range by the time we get to the second half of '19. And I think a lot of the builders are viewing a low to mid single digit improvement in single family starts as we go into 20. So I think you know the odds of being making a million three or somewhere north of a million three are pretty good in 2020 as long as mortgage rates hold them where they are. And certainly given where commodity costs are and more of the builders shifting toward first time buyers and dealing with the affordability issues I think I'll give kudos to Jordan.

I think they were couple of years ahead of other people in addressing that market opportunity and several others on the national side have started to move toward more entry level homes and are making progress on the affordability issues. So I think our view is that 20 2020 may look considerably better than '19 because of the weather disruptions on the front half of the year and if we get a normal weather pattern in 20 you could see us pushing toward a million three which will look pretty good compared to full year '19.

George Staphos -- Bank of America -- Analyst

Wayne, does the affordability issue and the need to right size the new home relative to the new buyer so to speak. Does that take away some of the growth that you would have otherwise thought that we would have otherwise expected for engineered would say a couple of years ago they were building smaller homes. Do we need as much EWP as we would have otherwise expected.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

I think our view here is that if we get single family growth of 3 to 5 that will just slightly exceed the volume loss from smaller medium than average home sizes. So it's probably maybe a one maybe a 2% plus in terms of product consumption but you're going to need something in the 4% to 5% pick up rate and single family offset the change in home size understood to last once and I'll turn over. It's been a while since we've asked on this you know any impact that you've seen in the market from the new supply and plywood that have come on a couple of years ago. From what we recall that has some operating issues to the extent you feel comfortable. What effect have they had in the market. And then could you update us on your longer term thesis in terms of what you think normalized but where this business should be mid cycle whenever we have that next mid cycle and the need to be long veneer given what would ultimately be a shortage of veneer.

George Staphos -- Bank of America -- Analyst

Thank you.

Thomas Corrick -- Chief Executive Officer

Okay. So let me start with your first question which is that its plywood mill that the private equity guys restarted or rebuilt. I think relative to the impacts from the OSB plant construction and what's coming in from Brazil that feed facility is a bit of a rounding error and not noticeable in the market and I don't clearly have an detailed view of what their operating rate is but it but it's in the grand scheme it's a rounding error in terms of mid cycle what products business. There are considerable puts and takes. I think the you know when we did our IPO we thought we would have about $45 of EBITDA margin in the plywood portion of our business and we would be running somewhere around a billion five on production and we obviously offload a monster and made some other changes. So I think our steady state production is probably closer to a billion three maybe a billion four.

And certainly with what's happened on the OSB side I'm not sitting here today feeling like we're gonna get $45 or even our margin in our plywood business short of some changes and obviously we're working on operational improvements to try to re expand even our margins but that's probably the piece of the earnings puddles on wood products that's the most challenged relative to what we would have expected you know five or six years ago. I think the Engineered Wood story very much intact shorted the fact that we're one hundred and fifty thousand or two hundred thousand start short of where we thought we might be at this point on housing starts. But I think our penetration our market share gains etc. are good. If I look at where our input costs are today relative to selling price I think the margins are in line with what we expected.

Again the volumes aren't quite where we thought they'd be but it's still a very good business for us and it remains to be seen what impact the new Roseburg facility coming up in South Carolina. Late this year or early next year we'll have. But again fundamentally feel very good about that business. And then obviously closing in a couple of lumber mills selling off our particle board plant. You know again that the wildcard to me is you know the difference between being at 130 million and even done 170 or 75 million of it does. What do you think happens on structural panels. But I think today I would tell you that what business is probably in the low to mid 125 150 range. But we've got work to do on our cost side and we'll see what impact the Roseburg facility has and frankly whether or not housing starts can continue to get toward a million 4 million 5. The demographics are certainly there to support it. But if we stay a million freight it's going to be hard to be meaningfully north of in my opinion 125 150 in the wood business.

George Staphos -- Bank of America -- Analyst

Given what's gone on with structural panels and EWP thank you and good luck on the quarter guys. Thank you.

Operator

Your next question comes from the line of Mark Wilde with BMO Capital Markets. Feeling so good.

Mark Wilde -- BMO Capital Markets -- Analyst

Yeah thanks. Just a couple of follow ups as well. One of them is just the you know when we look at the EPA data that year over year declines and I Joyce and I'll be out we're both quite large. I think you've addressed a little bit of this already but I'm just curious as to whether you think there's some substitution that kind of went on in the first quarter maybe because dimensional lumber was you know so low. Or whether this is just the sort of an aberrant quarter here in the first quarter that you know reflects weather and other things so much share.

Thomas Corrick -- Chief Executive Officer

So let me. I think Wayne spoke to you know a big piece of the dynamic which was again the kind of the West centrists census region given the penetration typically that we see especially with Joyce in that part of the part of the country. When starts were off on a quarter over quarter basis I think with 27% that has real impact in terms of Joyce consumption. So I think that was a key part of that in terms of what took place in the west and really across the business. The other thing that we look at and we work at and pay close attention to it is working with a range of builders in terms of conversion to dimensional lumber.

And we really just start. We don't see a lot of change. Typically when builders get locked in on subdivisions and even product in a given marketplace they tend to stay very kind of committed to that solution. So we're not seeing a lot of interchangeability from going from an aide Joy solution to a dimensional lumber solution. And we didn't really see much or experience much of that in Q1 based upon the builder relationships that we had. So again for us from our vantage point it's it's largely West related weather related and we haven't seen really any significant impact in terms of conversion back to dimensional lumber at this point.

And that's not not a huge driver for us today Mark but the other piece is we've got a pretty decent effort that's been under way now for 18 plus months to get more of our engineered into multi-family construction and like commercial construction. And I think over time that's another avenue that can give us some growth in the volumes outside of what's going on on single family starts. So as we think about the second half of '19 and then to 2020 that's one of the initiatives that will put a fair amount of effort behind is trying to get volume growth on the Engineered Wood Products. That's beyond what's just going on with single family starts.

George Staphos -- Bank of America -- Analyst

So we are just I'll just go ahead. I was just going to say like commercials like what if I see these kind of three and four story kind of wood frame hotels going up in the suburbs like that kind of stuff get market today.

Thomas Corrick -- Chief Executive Officer

Yeah exactly. So that would be the you know the various hotels and that's a that's a an active marketplace and one that we do well in and it's way in described it's an area of focus that we expect to further grow our penetration and those those kind of opportunities.

George Staphos -- Bank of America -- Analyst

Okay.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Last thing I would say Mark when you look at first quarter last year first quarter of this year last year we had a price increase demand was very strong very mild winter. And I think people were worried about where their next sticky LBO was going to come from where their next side Joyce was going to come from. And so there was no aggressive buying ahead of demand just to make sure you had inventory this year. So far I don't think people have been overly worried about availability of product and so they're carrying lower inventories and I think you saw a swing in increased inventory in the first quarter last year as you've just not seen this year.

George Staphos -- Bank of America -- Analyst

Okay that's helpful. Finally Wayne possibly get a sense of sort of low cost benefit in the first quarter and also whether there were any kind of inventory adjustments in the numbers in your offing. Well yeah go ahead Mike Yeah I guess what I'd say Mark is if you look across our entire system Bureau over a year there wasn't that much of an impact really in our. Average low cost.

Thomas Corrick -- Chief Executive Officer

Geographically there was. So in the Pacific Northwest particularly on the coast I mean of course look costs have come down relatively significantly but at the same time I think it was Tom that mentioned it because we have purchased logs that have been bought in the last two or three years that we have to consume. It was a fairly muted sort of decrease all things considered in the south our log costs were basically flat to up less than the percent.

So as the entire Boise Cascade system there was almost no either positive or negative impacts on what price variance which is probably not what you thought was going to say but when you roll it all up that's what that's what it looks like Rob kind of probably where we got the most cost input relief was on OSB that we use for the web part of our joist the vertical part of the eye we use about one square foot for every lineal foot of Joyce and that's where we've probably seen the most cost relief is on OSB input cost to make our choice.

George Staphos -- Bank of America -- Analyst

Okay that's helpful thanks.And then the inventory issue when really haven't seen any movements or adjustments on the inventory. Okay. That covers it for me appreciate it.

Thomas Corrick -- Chief Executive Officer

Thanks You've got a Yeah I don't comment on it. Yeah.

Quick wrap up. You know obviously a challenging quarter for us clearly compared to 2000 they 18 I'd say given the ongoing challenges with biotech pricing our focus on growing our EWP and distribution businesses continues to help our performance particularly as demand recovers from this winter and the slowdown we saw there and so all in all we feel good about the direction we're headed.

I want to thank everybody for joining us today and have a good day. Thanks Emily.

Operator

This concludes today's conference. You may now disconnect have a great day. Our first question comes from the line of George baseballs with Bank of America. Your line is open.

George Baseballs -- Bank of America -- Analyst

Good morning. How are you doing. Thanks for the details. I guess the first question that I had. Can you to the extent possible talk about what amount of downtime you took across your facilities in any WP and in plywood either in units or qualitative terms. And I know it's kind of hard to talk about downtime on a forward looking basis but any thoughts that you could share with us on that. What would be helpful when I had a couple of follow on.

Mike Brown -- Executive Vice President

Yeah. This is Mike Brown. I can take a stab at that George. So I'm like Hey doing so the VW there really hasn't been any what I'd call either market or capital related downtime in our EWP business the way we run that part of the business is obviously related to the market demand that we experienced during one time the on the plywood side. We have had some significant downtime in the latter part of last year and the first part of this year primarily related to the Pacific Northwest it was weather related and some market related downtime in total that may have amounted to a couple of weeks worth of equivalent production in the in the south or the southeast. I think you're aware we've had a pretty significant capital project that's been ongoing now at the Chester plywood facility that started in late February and in total will run for about 12 to 13 weeks.

And so at the Chester plywood facility that's going to represent a reduction in about 40% of the output for about six or 12 weeks. So there has been some reasonably significant amount of downtime primarily related to the weather a little bit of market primarily in the Pacific Northwest. And then the capital project in the east.

George Baseballs -- Bank of America -- Analyst

Thanks for that. And then if we if we consider Chester as well as fluorine what other strategic capital projects might you have ahead that would be required. As you know kind of so or whatever the market is ahead going forward.

Mike Brown -- Executive Vice President

Yeah. Looking forward. George as it relates to the Chester project here as I think Wayne mentioned that will come to a conclusion and start the ramp up phase in late late May. And by the end of the quarter I think we'll be at full speed of Chester. That's relates to fluorine that's a very big project. It really spans 18 months to two years and in total we're going to have I think a week or two this year at the very very most but it won't be in one concentrated event sort of we're going to take extended downtime as relates to maintenance days maybe an additional day here and then around the holidays and then we'll do the same thing again in 2020 when we start the ramp up with that that new log utilization center. So the impact on fluorine total volume this year is going to be relatively negligible to be honest. We're going to try and minimize that as much as possible and are after those off those two projects we really don't have any really major outages planned at this stage.

George Baseballs -- Bank of America -- Analyst

Thank you. And then my last question and I'll turn it over. Can you talk about what effect you're seeing or what you're seeing toward the end of the quarter in terms of imports of plywood into the market. The data is obviously reported at LAX it's kind of hard to say what's happening near term but are we seeing much effect at this juncture or is that a pickup in economic activity. Insufficient to absorb a lot of the supply that would've been coming out of out of South America.

Mike Brown -- Executive Vice President

Thank you. Well I can have a status so they can nick I guess from from the manufacturing perspective. The low pricing that they're willing to accept coming in from South America sort of set them the low bar in the market. And the last time I looked at the data was which was comparing first quarter this year to first quarter last year the total volume that has come in from Brazil was essentially equivalent. So not quite significant that equivalent. So maybe Nick you'd like to make some comments around how you seeing it from the side.

Let me jump in for a second. Jorge exports out of Brazil just to give you some numbers for the first part of the year we were just below thirty five thousand cubic meters in January fifty six and a half in February March and jumped up to eighty two thousand meters. And the data we just got in for April would say that there was 81000 cubic meters that left Brazil bound for the US. So in total right now year to date the US has received about 34% of the exports from Brazil. And if you contrast that with the year ago Brazil exports just over ninety thousand cubic meters in April to the US and for the full year last year we got 33% of Brazil's exports. So not a huge change in the overall volume from Brazil but it still represents significant capacity particularly along the eastern seaboard thank you.

Operator

And I'll turn it over I'm sure your next question comes from the line of Brian Maguire with Goldman Sachs.Your line is open.

Brian Maguire -- Goldman Sachs. -- Analyst

Hey good morning is Derek Leighton for Brian Burke a morning. Hey thanks for the details on the pricing. Kind of where we stand now relative to one Q And it does look like since the first quarter ended at least that the moderation in the declines that we've seen so far. Do you think there's any any further outages that are needed in the industry for us to start really seeing any upward momentum in plywood pricing and just maybe you could give us some sense of what you're seeing right now in terms of supply and demand in the market.

Thomas Corrick -- Chief Executive Officer

Yeah. On plywood I think supply and demand are reasonably balanced but I would tell you there's there's not a lot of lead time issues if you're a buyer and I think as opposed to 17 or 18 or plywood prices we're getting a lot of support from the lack of OSB in the market that has swung 180 degrees and there's plenty OSB around the price differential plywood. Quite wide. So our view right now is that there is a limited amount of downtime taking place across the market and we suspect that there's a number of producers that are operating close to cash Costco so in terms of pricing for here on plywood I think a lot of it will be driven if we get any pickups in industrial or repair and remodel activity. I don't see changes in housing demand or construction driving a lot of the plywood behavior. I think we're back to the fundamentals where we've got specific homebuilding markets that have a preference for plywood.

But I think what you're seeing on downtime and I'm pricing on plywood is very much driven by plywood fundamentals and the cost position across the industry. And we like others I think are managing our production where there a cash margin and otherwise I think to Mike's earlier comment we will use downtime as a mechanism where appropriate if we don't have orders or if we're finding ourselves running cash out of pocket at times.I would this is fun. I would add that you know fundamentally until we see a material rebound in OSB pricing I don't think we're expecting any material upward movement in with prices kind of.

Brian Maguire -- Goldman Sachs. -- Analyst

Thanks guys. And then maybe just get your sense for plywood inventories in the channel and we start to see that clear out at all or maybe any change there in the last few weeks.

Nick Stokes -- Executive Vice President, Building Materials Distribution

Brian this is Nick Stokes. Good morning. I think firewood inventories are for very similar to some of the other commodity products. As you know there's not a lot of data around that but in conversations with customers and observations from conversations with suppliers we have a belief that inventories are sufficient maybe on the false side across all those product lines.

Brian Maguire -- Goldman Sachs. -- Analyst

Got it. That's helpful. Thank you guys.

Operator

Thanks. Your next question comes from the line of Mark Wilde with BMO Capital Markets. Your line is open will next.

Mark Wilde -- BMO Capital Markets -- Analyst

You just answered one of my questions right there on the supply and the distribution channel sounds like there is plenty of inventory out there.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah I think you you've you've articulated fine Mark. I in certainly a different dynamic than a year ago and Wayne's earlier comment from a buyer standpoint there's plenty of availability.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay. Is it possible for you guys to give us a sense of what you've seen so far in the second quarter in terms of April activity.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

I think it's been decent. Mark we're continuing to see some weather disruptions mostly around rain and flooding but I think where things are drying out the activity levels picking back up. I think the biggest question we have as we move through spring and into summer is there's a pretty decent backlog of builder activity and activity at the retail lumber yard level but our view is that we're not going to be able to catch up on some of the weather delays that occurred in the first quarter just because of labor availability and the constraints around job site construction. So we think that the pace of business is decent in April and going into May and June but we're not looking for an absence of a 40% pickup in activity just because we don't think the labor availability is there to to allow some stubble build and make up some of the deficits that occurred in the first quarter.

Mark Wilde -- BMO Capital Markets -- Analyst

OK.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

But Mark this is Tom I would add the pace certainly feels better today the last 40 45 50 days has felt more normal than what we saw for the first two and a half months of the year which was pretty slow for a whole bunch of reasons.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay. And then just turning to the engineered wood business I'm just curious you know pricing has been good there but we're seeing costs come down. The man's been fairly static and and we're conscious of a new competitor moving into the southeast next year. I'd just like to get your general thoughts on maintaining EWP prices against that backdrop.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

So markets nature Morgenson concern specific to BP pricing what we're experiencing today is a pretty good balance in terms of demand and supply across most markets. So we are expecting any real change in terms of pricing as we go through the balance of this year relative to the new capacity coming on later this year or at some point next year. Really not a lot of discussion in the marketplace around that. So I think as we look at the balance of this year we feel supply and demand I need to be in pretty good balance and as a result pricing should reflect that OK.

Mark Wilde -- BMO Capital Markets -- Analyst

All right. And then the last thing for either Wayne or Tom it it just seems anecdotally when I kind of keep an eye on the trade press that maybe there's been a pickup in building products distribution MDA in recent quarters. You know I wonder if you would agree with that if we're seeing kind of more consolidation taking place and distribution and maybe also get some thoughts on just sort of valuations on distribution businesses.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Mark I'll take a shot at I my sense is part of what's going on certainly in the transactions that we've worked on. It's been driven partially by consolidation but I would tell you more than anything it's been driven by people with succession planning and looking at their time horizon and I think the slowdown in the back half of 18 may have reminded people of what the last slowdown look like. You know valuations are probably haven't changed a lot but I think in terms of the expectation that we're going to get back to a million 4 million five housing starts and that there's substantial runway from here forward. I think some people will have a decade sense of recovery really started.I think some of them are aging into their 60s or 70s and concluding that this is a good time to do an orderly handoff of their business OK.

Mark Wilde -- BMO Capital Markets -- Analyst

All right. That's helpful when I'll turn it over.

Operator

Your next question comes from the line of Jeff Skilling with Vertical Research. Your line is open.

Chip Dillon -- Vertical Research -- Analyst

Hey good morning everyone. First question has to do with just maybe review where you stand in terms of your footprint. I know that both in plywood and lumber you've you've shed some assets in the last year or so and are you pretty much done with that program or do you think there could be more to go either in distribution or especially in wood products. Chip this is correct.

Thomas Corrick -- Chief Executive Officer

I think that you know we went through a fairly diligent process of structured process last year as we've tried to address some of these opportunities related to non core assets or assets that were challenged but absolutely and you know I would say that I'm not at this point I don't think there's anything material on the horizon that we'd be looking at in either business.

Chip Dillon -- Vertical Research -- Analyst

OK that's helpful.

Thomas Corrick -- Chief Executive Officer

And then if you could review for us in an engineered wood both LV L and I Joyce When was your last price increase and is there anything going on in the marketplace and pricing that has it. You know I would imagine that as lumber has stayed soft that it would have more of a volume impact and a price impact. But any help along those lines would be would be appreciated.

Chip Dillon -- Vertical Research -- Analyst

And just so on the pricing so that announcement that we had on our last price increase was January of 2018. And so in terms of pricing expectations kind of going forward again. I think things are in relative balance it's work even though some of the raw material prices may have have been lowered. In terms of the overall marketplace again that despite the managers in relatively good balance. So that's kind of what we're expecting to see for the balance of certainly the building season and for this year. And again we would expect pricing to reflect that.

Thomas Corrick -- Chief Executive Officer

This way and let me add in a couple of points. The Engineered wood for us and certainly for our larger competitors is a less price business. A lot of long term relationships and a huge service component down through the supply chain including obviously the wholesale alignment internally with Boise Cascade and down through the retail lumber yards.

So if your recall the strong run in OSB and in lumber a year ago we we did not raise prices in EWP in response to input costs. It's much more on the supply and demand and what's going on with EWP so we didn't you know we weren't able to maintain margins on the way up on lumber and OSB a year ago and likewise we're not retreating on this price simply because input costs have changed. The other thing is we mentioned this morning the major downdraft in single family starts in the West this year relative to early 18.

And if you look at where I joist are used they're typically used in raise floor and in two story situations particularly in our case. So where you've got a disproportionate amount of construction going on in the U.S. south southeast where there's a lot of slab on grade and in certain cases single story activity you get less joint consumption because you have fewer because cash.

Chip Dillon -- Vertical Research -- Analyst

That's helpful. And then lastly as you look at that your mill system and you think about CapEx next year and I know it's early but at least directionally do you see it more likely to be flat up or down next year versus this year.

Thomas Corrick -- Chief Executive Officer

Assuming you don't make an acquisition a big acquisition I think CapEx will be relatively flat it may come down modestly that the major projects that we'll have going in 2020 is the completion of the logs utilization center at fluorine.

As Mike said that's really about an 18 month project that will start later this year in earnest and care into 2020 but we'll be through the project at Chester BMD capital requirements outside acquisitions are going to be reasonably flat. And then once we get toward the latter part of 20 and into 21 right now there's no substantial projects identified in would. So I would expect it to drop back down to the 75 85 level.

Chip Dillon -- Vertical Research -- Analyst

Great. Thank you.

Thomas Corrick -- Chief Executive Officer

Thanks Jeff.

Operator

Our next question comes from the line of Curt younger with Davidson. Your line is open.

Curt younger -- Davidson -- Analyst

Good morning everyone and thanks for taking my questions. Morning Curt. Yeah thanks. Just starting off I was hope being you guys can maybe give some color as to margins in the western plywood operations and understanding you might not want to get into too many details maybe just kind of talk about it relative to what you're generating in the south.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah. Put it this way and let me do this and then Mike you can add in. I think it's safe to assume that given our product mix in western Oregon which is really using residual veneers that we don't take an engineered wood to make on a relative basis commodity type panels that would not be a fun product mix if you were a stand-alone plywood producer if you're producing plywood in western Oregon Western Washington you really need to do a high value product just given the relative low cost and and that is not what we're doing we're taking the higher value in here and putting in the EWP if you were to look at our mill in Northeast Washington in Kettle Falls.

It's exceedingly low cost has very good throughput and we've got decent cash margins in Kettle Falls today and at the pricing we have. But but again if you were running a commodity plywood mill in western Oregon given log costs you would not like the outcome which is why a lot of the plywood industry that's running commodities is located in the US.

Curt younger -- Davidson -- Analyst

Gotcha. No, that makes sense and I mean just taking it a step further I mean there's obviously kind of a common thread between what's going on in the lumber side between some of the curtailmenents, enclosures, and what you just reference and I'm I'm sort of wondering whether your expectation would be that over time you know you might actually expect capacity to come off line in the West or whether you think prices right now are sort of subdued and that people will kind of wait it out.

Unidentified Speaker

Well, thank you, Curt. Go ahead Mike.

Mike Brown -- Executive Vice President

No, no, go ahead Wayne, we've probably have similar views about how this is going to work.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah I think again if you look at late 2016 through 2017 and into the early half of 2018 I think the plywood industry in general got a bit of a reprieve given the shortages we had in OSB. So for a number of decades we've seen substitution of OSB for plywood and I think given the capacity overhang in OSB at the moment you will see a number of OSB players trying to make a push into more value added parts than industrial. And I would suspect we will continue to see modest structural decline in plywood where the attributes of OSB work and are readily substitutable, the cost of OSB is lower. So I think not unlike the GP announcement that occurred late in 2018 I would expect that if we see one costs where they are product pricing where it is and if OSB continues to be at a discount I think you will see capacity removals in plywood take place in 2019 and 2020 on some kind of reasonable pace and I think you'll see ongoing substitution for OSB into some of those end users as they make progress on the product development.

Mike Brown -- Executive Vice President

The other thing I would throw out there Curt is that you know the log buying process is very much tied to the product price environment and we obviously purchased logs in advance as well as logs at the gate. And so it takes time to balance our -- the cost of our log inputs back to the market, but certainly over some period of time lower cost producers can get back into a position where they'll generate some margin simply by -- reflected by the fact they can buy logs cheaper when the markets soft.

Curt younger -- Davidson -- Analyst

Gotcha, thanks. And that's helpful color. And then one for Nick I know you touched on it a little bit earlier but I was hoping you could talk about maybe the demand pull you're seeing from the dealers and the home improvement channel and whether there's a big disparity there or if anything's kind of surprised you about actions or activity in the market over the last couple months?

Nick Stokes -- Executive Vice President, Building Materials Distribution

I think the way I think about that Curt is the home center business for the last certainly in the first quarter had a little more stability to it as you well know home center business on the products that we're involved with him have a large seasonal component particularly as they start to ramp from March, April some of the building season related to projects and we've seen a nice -- to Wayne's earlier point we've seen a nice increase in those kinds of dynamics. I think from a dealer standpoint and if you contrast the first quarter of 2019 against the first quarter of 2018 very different dynamics in terms of price escalation, weather related, mill related supply challenges certainly housing starts activity in certain parts of the region in 2019. And I think dealers just behave irrationally in terms of match and their purchases to their demand and their forecasts. So your last question have I seen anything weird or unusual, no weird or no one more unusual than any other year, so it's kind of steady as it goes.

Curt younger -- Davidson -- Analyst

Okay, thanks Nick. And lastly I was just hoping you might talk about how you're thinking about your cash balance this year and where ideally you think that would stand, Just given your available debt capacity as well?

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah, so on -- kind of what we think of as capital allocation first priority obviously is to fund the $85 million to $95 million we've got from an internal capital toward growth and operational improvements, Nick and his team continue to look for tuck-in acquisitions not just similar to what we just closed on the Birmingham, Alabama opportunity. We've obviously got the regular dividend that $0.09 a quarter and to your point we feel very good on where our debt levels are relative to our EBITDA on and certainly relative to our cash balances.

So really the question is if we don't find good opportunities in distribution or adjacent opportunities on the manufacturing side, we will look at some combination likely our share repurchases and or other ways of returning cash to shareholders if the balance sheet is in good shape, but we're comfortable running with $120 million maybe a $150 million in cash, I think that get meaningfully above the $150 million number we're probably going to look at various ways of getting cash back to shareholders just because we think it's inefficient from a return on capital to sit on excess liquidity, but our preference would be to grow the business if we can find the right opportunities.

Nick Stokes -- Executive Vice President, Building Materials Distribution

And I would note there is at least a couple of things we're aware of that will be coming at us and whether we do anything or not I don't know, but certainly I think for the balance over the next several months was we'll (inaudible) be in pretty steady state position as we look at these potential acquisitions.

Curt younger -- Davidson -- Analyst

Okay. Great. Thanks Wayne, thanks Tom and I'll turn it over.

Operator

(Operator Instructions) Your next question comes from the line of George Staphos with Bank of America. Your line is open.

George Staphos -- Bank of America -- Analyst

Hi everyone. Thanks for taking the follow-on. Tom when you talk with your builder customers, what do they say whether took away from demand this year or said differently if we could hold the same economic growth, the same wage level and all the other fundamentals that go into housing, what kind of demand pickup could we see in 2020 relative to '19, I know that's a really hard question, I'm not going to hold you to it, but what are your customers saying was loss this year it could potentially come back next year?

Thomas Corrick -- Chief Executive Officer

Yeah, I think I'm going to hand that one over Nate, George he is little closer to the market than I am on a day to day basis and certainly had some impact that Nate if you could provide some color.

Nate Jorgensen -- Chief Operating Officer

Yeah, George, so I think if you look at kind of the fundamentals of most home builders as we exited 2018 obviously there was a lot of headwind relative to cost of money some concerns in terms of the economy and I think as they transitioned into the early part of this year and including feedback from the International Builders Show, I think there was a right level of optimism in terms of what was in front of them and obviously the challenges at that point in time were largely weather related.

The feedback that we get from the builders ranging from the custom builder to the national builder and some of it is geographically based in terms of kind of local economies and local trends.

George Staphos -- Bank of America -- Analyst

Sure.

Nate Jorgensen -- Chief Operating Officer

But there is a belief that housing should continue to improve. And I think one of the things that we continue to hear from builders is that affordability is a key driver in terms of what that demand will look like. And so they are attacking that in various ways including the size of the average square foot for single family construction, the continued focus on multi-family construction as well so. So I think the conditions overall from an economy and from unemployment cost of money those are all I think are quite favorable but it's clear that the builders that we talked to are they continue to be focused on affordability and making sure that first time homeowner can actually get into the home. So I guess we're -- we see continued opportunity and housing start improvement is again as long as those conditions remain in place.

George Staphos -- Bank of America -- Analyst

But there isn't a common denominator or view from your customers in terms of what amount of volume was lost this year that will return next year, but it was lost due to weather and other disruptions and if that's the case that's fine, I just want to confirm that.

Nate Jorgensen -- Chief Operating Officer

Yeah. I think the way I would describe it, George, if we were at a $1,250,000 , $1,260,000 a year ago, I think we will be challenged to hit that based on what we're hearing from our customers in '19, not because demand will be weak in the back half of the year, but just trying to catch up with the volume that was lost in the front half of the year. And having said that I think we'll be on a build pace that's in the $1,280,000 plus range by the time we get to the second half of 2019. And I think a lot of the builders are viewing a low-to-mid single digit improvement in single family starts as we go into 2020. So I think you know the odds at being at $1.3 million or somewhere north of $1.3 million are pretty good in 2020 as long as mortgage rates hold them where they are and certainly given where commodity costs are and more of the builders shifting toward first time buyers and dealing with the affordability issues I think I'll give #2 (inaudible) . I think they were couple of years ahead of other people in addressing that market opportunity and several others on the national side who have started to move toward more entry level homes and are making progress on the affordability issues. So I think our view is that 2020 may look considerably better than '19 because of the weather disruptions on the front half of the year and if we get a normal weather pattern in 2020 you could see us pushing toward $1.3 million which will look pretty good compared to full year 2019.

George Staphos -- Bank of America -- Analyst

Wayne does the affordability issue and the need to right size the new home relative to the new buyer so to speak, does that take away some of the growth that you would have otherwise thought that we would have otherwise expected for engineered wood say a couple of years ago they were building smaller homes do we need as much EWP as we would have otherwise expected?

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

I think our view here is that if we get single family growth of 3 to 5 that will just slightly exceed the volume loss from smaller medium than average home sizes. So it's probably maybe a one maybe a 2% plus in terms of product consumption, but you're going to need something in the 4% to 5% pick up rate in single family offset the change in home size.

George Staphos -- Bank of America -- Analyst

Understood. Two last ones and I'll turn over. It's been a while since we've asked on this, you know any impact that you've seen in the market from the new supply and plywood that have come on a couple of years ago from what we recall that has some operating issues to the extent you feel comfortable what effect have they had in the market? And then could you update us on your longer term thesis in terms of what you think normalized EBIDTA for this business should be mid cycle, whenever we have that next mid cycle and the need to be long when you're given what would ultimately be a shortage of the near. Thank you.

Thank you.

Thomas Corrick -- Chief Executive Officer

Okay. So let me start with your first question which is that is plywood mill at the private equity guys restarted or rebuilt. I think relative to the impacts from the OSB plant construction and what's coming in from Brazil (inaudible) facility is a bit of a rounding error and not noticeable in the market and I don't clearly have an detailed view of what their operating rate is but it's in the grand scheme it's a rounding error.

In terms of mid cycle what products business, there are considerable puts and takes, I think the -- when we did our IPO we thought we would have about $45 of EBITDA margin in the plywood portion of our business and then we would be running somewhere around a $1.5 billion on production and we've obviously offloaded (inaudible) and made some other changes. So I think our steady state production is probably closer to $1.3 billion maybe $1.4 billion and certainly with what's happened on the OSB side I'm not sitting here today feeling like we're gonna get $45 the EBITDA margin in our plywood business short of some changes and obviously we're working on operational improvements to try to reexpand EBITDA margins but that's probably the piece of the earnings puddles on wood products that's the most challenged relative to what we would have expected five years or six years ago.

I think the Engineered Wood story very much intact sort of the fact that we're 150,000 or 200,000 start short of where we thought we might be at this point on housing starts. But I think our penetration our market share gains et cetera good, if I look at where our input costs are today relative to selling price I think the margins are in line with what we expected again the volumes aren't quite where we thought they'd be but it's still a very good business for us and it remains to be seen what impact the new Roseburg (57-10) facility coming up in South Carolina late this year or early next year we'll have. But again, fundamentally feel very good about that business and then obviously closing a couple of lumber mills, selling off our particle board plant, that the wildcard to me is the difference between being at $130 million in EBITDA and $170 million or $175 million in EBITDA as what do you think happens on structural panels. But I think today I would tell you that what business is probably in the low to mid $125 million, $150 million range, but we've got work to do on our cost side and we'll see what impact in (Roseburg) facility has and frankly whether or not housing starts continue to get toward a $1.4 million or $1.5 million. The demographics are certainly there to support it, but if we stay at $1.3 million it's going to be hard to be meaningfully north of in my opinion $125 million, $150 million in the wood business given what's gone on with structural panels and OSB.

George Staphos -- Bank of America -- Analyst

Thank you, Wayne and good luck on the quarter guys.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Thank you.

Operator

Your next question comes from the line of Mark Wilde with BMO Capital Markets. Your line is open.

Mark Wilde -- BMO Capital Markets -- Analyst

Yeah thanks. I had Just a couple of follow ups as well. One of them is just the -- when we look at the APA data that year-over-year declines in (58-33) were both played large, I think you've addressed a little bit of this already but I'm just curious is to whether you think there's some substitution that kind of went on in the first quarter maybe because dimensional lumber was so low or whether this is just the sort of an aberrant quarter here in the first quarter that reflects weather and other things?

Nate Jorgensen -- Chief Operating Officer

So, Mark it's Nate Jorgensen, let me, I think Wayne spoke to a big piece of the dynamic which was again the kind of the West census region given the penetration typically that we see especially with (59-15) in that part of the country when starts were off on a quarter-over-quarter basis I think was 27% that has real impact in terms of (59-) consumption. So I think that was a key part of that in terms of what took place in the west and really across the business. The other thing that we look at and we work at and pay close attention to it is working with a range of builders in terms of conversion to dimensional lumber and we really just start -- we don't see a lot of change, typically when builders get locked in on subdivisions and even products in a given marketplace they tend to stay very kind of committed to that solution. So we're not seeing a lot of interchangeability from going from an (60) solution to a dimensional lumber solution and we didn't really see much or experience much of that in Q1 based upon the builder relationships that we had. So again from our vantage point it's largely West related, weather related and we haven't seen really any significant impact in terms of conversion back to dimensional lumber at this point.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

And that's not not a huge driver for us today Mark, but the other piece is we've got a pretty decent effort that's been under way now for 18 plus months to get more of our engineered into multi-family construction and like commercial construction. And I think over time that's another avenue that can give us some growth in the volumes outside of what's going on on single family starts. So as we think about the second half of 2019 and then into 2020 that's one of the initiatives that will put a fair amount of effort behind is trying to get volume growth on the Engineered Wood Products that's beyond what's just going on with single-family starts.

Mark Wilde -- BMO Capital Markets -- Analyst

So that we are just -- go ahead.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

No, go ahead.

Mark Wilde -- BMO Capital Markets -- Analyst

I was just going to ask that like commercials like what if I see these kind of three and four story kind of wood frame hotels going up in the suburb is that kind of stuff.

Nate Jorgensen -- Chief Operating Officer

Yeah, Mark, it's Nate, yeah exactly. So that would be the various hotels and that's an active marketplace and one that we do well and as Wayne described it's an area of focus that we expect to further grow our penetration in those kind of opportunities.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Last thing I would say Mark when you look at first quarter last year and first quarter of this year, last year we had a price increase, demand was very strong very mild winter, and I think people were worried about where their next (60-01) was going to come from where their next () Joyce was going to come from. And so there was aggressive buying ahead of demand just to make sure you had inventory this year, so far I don't think people have been overly worried about availability of product and so they're carrying lower inventories and I think you saw a swing in increased inventory in the first quarter last year as you've just not seen this year.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay. Alright that's helpful. Finally, Wayne possible to get a sense of sort of log cost benefit in the first quarter and also whether there were any kind of inventory adjustments in the numbers? I mean...

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah, go ahead Mike.

Mike Brown -- Executive Vice President

Yeah I guess what I'd say Mark is if you look across our entire system year-over-year there wasn't that much of an impact really in our average log cost geographically there was, so in the Pacific Northwest particularly on the coast I mean of course log cost have come down relatively significantly, but at the same time I think it was Tom that mentioned and of course we have purchased logs that have been bought in the last two years or three years that we have to consume, it would have fairly muted sort of decrease all things considered. In the south our log costs were basically flat to up less than the percent.

So as the entire Boise Cascade system there was almost no either positive or negative impacts on what price variance which is probably not what you thought was going to say but when you roll it all up that's going to what it looks like.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Right.

Unidentified Speaker

Probably where we got the most cost input relief was on OSB that we use for the web part of our I-joist, the vertical part of the I; we use about one square foot for every lineal foot of I-Joist and that's where we've probably seen the most cost relief is on the OSB input cost to make I-Joist.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay that's helpful thanks. And then on the inventory issue, Wayne.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Really haven't seen any movements or adjustments on the inventory.

Mark Wilde -- BMO Capital Markets -- Analyst

Okay. Super. That covers it for me.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Appreciate it.

Thomas Corrick -- Chief Executive Officer

Thanks, Mark.

Operator

We have no further questions at this time.

Nate Jorgensen -- Chief Operating Officer

Okay. Thanks Emily, do you got any final comments on it.

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Yeah, quick wrap up. Obviously a challenging quarter for us clearly compared to 2018, I'd say given the ongoing challenges with (60-04) pricing our focus on growing our EWP and distribution businesses continues to help our performance particularly as demand recovers from this winter and the slowdown we saw there. And so all-in-all I feel good about the direction we're headed. I want to thank everybody for joining us today and have a good day.

Nate Jorgensen -- Chief Operating Officer

Thanks Emily.

Operator

This concludes today's conference. You may now disconnect. Have a great day.

Duration: 54 minutes

Call participants:

Wayne Rancourt -- Executive Vice President, Chief Financial Officer and Treasurer

Thomas Corrick -- Chief Executive Officer

Mike Brown -- Executive Vice President

Nick Stokes -- Executive Vice President, Building Materials Distribution

Nate Jorgensen -- Chief Operating Officer

Unidentified Speaker

George Baseballs -- Bank of America -- Analyst

George Staphos -- Bank of America -- Analyst

Brian Maguire -- Goldman Sachs. -- Analyst

Mark Wilde -- BMO Capital Markets -- Analyst

Chip Dillon -- Vertical Research -- Analyst

Curt younger -- Davidson -- Analyst

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