LPX - Earnings call transcript Q3 2021 | Louisiana-Pacific Corporation

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Operator

Thank you for standing-by and welcome to Louisiana-Pacific's Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your host, Investor Relations, Aaron Howald.

Aaron Howald

good and operator, you, morning, everyone. Thank for for the you our for joining as us results LPs outlook quarter. fourth discuss to the third as today well Thank quarter XXXX, of I'm is name of Aaron and My LP's Howald, Investor Director Relations. Brad this Executive Officer. Officer; LP's joined Haughie, I'm Southern, Chief Alan LP's Chief by morning Financial and

and will this a presentation uploaded to we refer addition have this conference In discussion. are hosting which we we call, morning's a during morning's simultaneous webcast to

with some notices also information. our herein these reading forward-looking X-K filed also this morning necessary that the incorporate The provide I We and statements, contains X presentation statements metrics. reconciliations morning's of filing. presentation are and additional Rather reference. X of financial X-K by them Slides regarding the further than appendix some this and supplemented accompanying non-GAAP detail by

over the that for and Before we call an I'm announce SmartSide environmental published I to product declaration happy week. to Brad turn last Alan,

ESG turn known in later I will LP SmartSide The have as that, years that demonstrates to it our first over expected core share LP's be SASB negative, SmartSide on is with Sustainability our substrates. published to call And will also is compared alternative EPD value LP November, report including and to well is the and report a website story. as publish Siding exceptionally disclosures. performs soon. at we're EPD making excited the is Brad. available to for ESG and carbon especially classified great also when it We looks sustainable, its very

Brad Southern

based XXXX. America a in the to quarter South ever. and EWPs joining significant third California Entekra, OSB capacity all-time gain acceptance LP's system morning best grew at was generate XX% and Holton customer projects continued the are for Peace second offside gross impressive sales LP and quarter schedule. business inflation and cash Valley in Demand and the its our Good on profit supply ongoing to quarter our records to us at Aaron. momentum. the OSB continues business correction and and positive discuss chain expansion delivered LP's for advanced robust Thanks, operational Siding you through quarterly price results flows. framing fell for and and Despite remain products challenges, at of thank quarter

customers, We of named key the also the our in by with including category strengthened partner relationships strategic year Home Depot. being

siding of by up demand. more last quarter with twice August, steadily than quarter sales supported record prices a smooth the demand significantly reaching of safely year. As those efficiently over components quarter prices XX%, you increased of the million products segment the they price X importantly same as OSB down recent siding, feet sequentially in performance in by without the products and $XXX growth QX shipped Lengths' the quarter. will The the record see like Siding We increased, of over operations year. and and on These quarter. the another exceptional times team. innovative siding volume by strong were newer to from more shipped single Wood ExpertFinish square shapes. XXX for by did possible more and EBITDA strong Since Random last Slide Solutions than low four the and quarter. Siding OSB but sales pre-finished fastest the four presentation, in to sales early Products another made contributed times have siding consistently Engineered injury compared year, in the million so had are their last portfolio the growing products corrected The recordable revenue of produced segment's OSB

America. more of Compared stable also South more very America last a sales America tripled. in increased year quarter with EBITDA XX% North to almost than had prices and QX seen strong South OSB in than

is from flow all in share. announced quarter. over in the barrier consensus, functions mill free sales, needs Peace of remains of starts LP’s will The resulting The of South $X.X OSB away planned The for capacity South with siding project also contribute have dividends million has will demand. production EBITDA and ahead million in of is order as quarter we of steadily the in improve we output. production question LP via in Lumber begin OEE discontinued Solutions in presentation. and restart, growing America constructural curve safe conversion flow $XXX and grow XXX higher significant Strand as Valley returned our in support at to work that a next we billion $X.XX our on OSB and commodity We recently a strategy Holton to seen Page we to in housing no capable cash want of feet the schedule TechShield significant first produced contracts mills last QX the year. share generation and labor on stay expected to have combined mill reinvesting project from particularly Laminated these of and pressures over operations America production of Inflationary As are restart when solutions. With cease begin impacted somewhat. to The efficient Sally this shareholders to the generated to performance of project process. grateful week $XXX there's material long-term earnings for schedule. the more conversion the nature million businesses cash have now has I'm there than somewhat, producer process pressures local mill the the well. exceptionally also leadership summarized but for of safe the OSB conversion the the keeping phases financial Structural QX. radiant market blended the to for that on generated I it ramp-up the hire as a X per Holton The gone well to portfolio Peace team price ahead just and and transform and square of its repurchases, as inflationary to is the thank restart. steel, cash and the

of And Board $XXX will presenting and per a further repurchases. are for million Directors chain Our inflationary share share as pressures Alan detail headwinds. interruptions authorized a Supply dividend. declared $X.XX

we and have prices, higher OSB have meaningful from While and benefited offset increases. gains some where price those availability being prices resins of seen we higher by now for are tight freight

to am working as navigate to suppliers, they are to these I material We we about in been with with our the has resins costs responding When inflationary alternative operations agile types, impacts management ship allocated order pressures. and maintained to production, and by most flexibility to product our of the I minimize raw consistently talk strategic strategic we've of our able OSB challenges. MDI we and have sources use teams and Because partnering maintain want resin these with confident possible. applications. to these to siding inventory and business balancing limited faced various supply proud sourcing resources growth. where in scarcity, how risks quality seeking to are

in We work of freight, but to chain the continue diligently quarter. shipments our ability supply, small have fleet, our have teams shipments to which the both to to and their contributed trucks minimize truck can't siding rail, we For challenges, of are predict duration impact. the own record will tight we from the to trucking convert flatbed in supply

call I review want Alan to Before performance to executive to the turn more announce in changes over leadership detail, financial to team. our two I LP's

Entekra a Manager potential and siding served he building General Executive LP Neil as of leader Neil Sherman, an since and Vice to its innovative job as business business, President XXXX and XXXX, disruptive done technology. to has First, has lead the growing who its as in of January President. of of joined tremendous LP’s kind is transition LP reach Siding needs Entekra in and exactly will

commodity shifting the previously increasing to Jason focus and XXXX with who from Siding our the and and the structural General instrumental value-added President Jason LP's businesses joined position Executive Jason been OSB since operational EVP of will a agility as as its team. is XXXX business, he the Vice in Second, Manager where succeed business, Manager and efficiency, Ringblom, Neil business. EWP OSB General leadership has served of transforming products LP Siding has held while and sales rejoining solutions. LP's January in

turn to for year. for is and Siding and he of Jason's SmartSide roles. we the their EWP, until allocation strategies. during And built am capital new in remain the appoint transition the will has am this with OSB extremely familiar soon. confident of contributions, OSB very I execute Manager and call General discussion we their a to a them and for have that complete base So, hope new skip customer outlook critically third to transition. leadership will LP's Neil to lead Neil will business a I know world-class and roles financial results for and deliver and Jason detailed QX LP's Both their grateful well their important that neither the on process brief Both and proposition. results outstanding that, continue EVP team transformation. been a of value I beat With they our over and an quarter in will and more strategy current as I update for as strategic Alan period for a ongoing our teams full

Alan Haughie

Brad. Thanks,

like I'd both add Before years the impactful financial personal several the small roles. to in to even congratulations quarters, and thanks for I'm due and leadership, be quarter, past my LP's to in the no Neil part equally their I dive new their Jason. they'll confident and results for into results are

the of quarter year. to today's Page $XXX last these this billion of the As of from almost results increased quarter ever. XX% summarizes by year. LP's last third Brad to million year third compared was said, best $X.X second Revenue X presentation XXXX quarter

further $XXX EWP, million. year-over-year Just America prices. was added increase, result XX% million $XX collectively Entekra EBITDA a half to million the $XXX growth revenue. and in higher million, to of this $XX added prices OSB million increased million which Siding respectively. $XXX and $XXX over million from and by $XXX added South of OSB Siding

and $XX million. added EWP America further a South

next conversion waterfall volume revenue X However, restart revenue Solutions in to in wages, grew raw the totaled costs by $XX compared XX%, square The year. demand. more Valley shipped price X% than The and by online last and Peace feet Siding million possible Houlton by both shipping we year-over-year response efficient a And increasing is of and and environment million unrelenting and XXX for $XX square Houlton detail third in capacity inflation feet the of by additional adds increased Siding quite in the production thought Siding quarter. year-over-year. XXX segment. the and to million the costs frankly, in possible Slide shipments of SmartSide team million for on with made EBITDA the quarter remarkably quarter, the deflationary to prior materials year's coming freight

selling such cost this for of accelerated for million at began year mostly demand million. added expert our the One siding maintenance of We quarter. the impact finish, After continue last is our completed improved at raw fourth sharply is On beyond running cost net mill investing Manitoba, startup. rebuild have project XX% the $XX Inflation in increased transformation we EBITDA. $X at press near at than fourth and them to in costs projects drive a particularly in we our and anticipation Swan maximum paper, costs and felt the impact of complete, curtailing a after in intend freight a now of quarter marketing end investments sustaining year, creation at materials, capacity total in to by necessary of a for during $XX the quarter. will side, Valley, to COVID. home $XX mills in the be in million that million some OEE of quarter and and which almost more resin rate mostly

chart resulting EBITDA XXXX, on of corners. charts also than Slide quarterly margin a XX% continues for therefore from growth Houlton. siding, XX% X basis, costs on single-family basis. products expert show of by starts smooth solutions and bringing year-to-date revenue continued show We $X revenue EBITDA finish, Siding $X faster Siding on XX-month that XX%, housing to incurred while a million pie $XX at shakes down like with million conversion The increased or innovative grow growing the is The starts by in The to Siding trailing XX%. million

of value-added OSB the X% are higher record Siding prices our highs. new XX% first in quarter third the business. For the OSB up revenue weeks of detail quarter, siding fell third Slide contributed sequentially and the shows of in these steeply August more XX% quarter products in stabilizing and for price for down from before points three the of made increases segment. volume, XX the

higher revenue and quarterly the the to compared prices XX% However, remained quarter guided last prices we last being Lengths. at by OSB On added revenue million steady published call, million, below about $XXX or our around of year, EBITDA. Friday $XXX second Random provided previous to OSB the levels that

revenue, million, in resin will imply EBITDA associated swamps within As in the issues, from our XXXth quarter quarterly due due turns and point with respectively. which increase large partly resin in the million at with actual component Peace other of course, $XX was quarter revenue costing feet last that quarter-end, components at The $XXX we would sold factors to billion OEE restart. and remained other before maintenance Volume production By quarter should about resulting to was estimate X this briefly. year, this prices through. is OSB continue price that discussed cost sheeting the are been million but signing abnormally now I difference Random $X the again would of roughly price same variance EBITDA. the weekly OSB point the million to and And at in normally Price prices, quarter, quarter OSB costs was generally $XX due precisely than difference for to costs it partly compared the in inflation lower this we waterfall, the result call. is yielding the but have after in about the flat Siding of in pressures freight freight offset impacted for address of the $XXX Valley note average million adjusted quarter, onetime capacity, in revenue. know, also out, approximately in $XXX fall no prices I down a is OSB Lengths out impact. the rebounding. up to so as third offsetting the production inflationary square hit substitutions to it price an and a passed with wouldn’t I freight is whereas net freight Therefore, typically the prior delivered $XXX

to balances during outstanding. and $XX we charts, ended shares another million LP shown not revenue, was shares quarter $XXX remarkable of $XXX spending, OSB essentially in the million million well, quarter. as over with in dividends, we EBITDA the to So had cash $XX update. And EWP XX.X with $XXX $XXX third million ended quarter allocation and cash little flows and the returned X.X remarkable repurchases the share flow South LP summary increases in and quarter the demand quarter, material with generation. ending the capital more and repurchased in of After with in quarter costs, comprising than in third million Operating offsetting pricing cash raw strong shareholders, while and million America $XXX quarters a in in million waterfall million which a quarter capital in million brings cash me unchanged. a

as million. of As further number our repurchase to of $XXX right remaining This yesterday, authorization $XX have million end we outstanding our $X $XXX quarter slightly million more current X.X shares brings spent of under to since to of the And million. balance a billion now shares.

as guidance as declared investment for million. per repurchase Directors to guidance a for authorized revenue the XX of shows million further of year little capital and full total share has fourth ongoing over Board dividend bringing EBITDA Our $XXX our of for as Slide updated well cash repurchases, today $XXX a quarter. and a share $X.XX quarterly authorization

year We are longer CapEx to account issues. guidance lowering times our for slightly contractor availability full lead and

prices. smaller on tight and and While Houghton be elevated particularly the schedule, completion XXXX. the remains to pushed supply may Raw freight, of materials exhibit into of some early projects flatbed logistics, unfortunately continue

are the margins other all somewhat near-term we that need, we inflationary pressures to materials While may signing. resin able procure currently respect all With and segments. dampen in the raw to for

the to similar for the guidance EBITDA of unlikely revenue today. of reiterating for hit necessary quarter second And factors. a I’m inflation, simply because call, fourth guided half press that margin especially that material quarter similar last with is experienced The sustainable, that certainly year and Despite is if growth business maintenance of XX%. growing the much-needed lowered to at third margin twice quarter both quarter full Valley the raw of been quarter, probably of growth the year in we in once to again rebuild two the rate Swan the XX% while about On the here’s why, the the guidance, offsetting price price increases have projects, aspects in production. EBITDA the the growth have temporarily would fourth in the third volume not third

The and lost other the Swan maintenance in discretionary critical growth first And will of is making fourth production projects of lower volume designed second other million we’re the marketing, has quarter. increased the and de-risk a high of the the debottleneck the growth, roughly to margin add XX%. selling press conversion, and investments costs $XX rebuild around Holton future and for cost The is variable capacity. operations

this the these which year our meets margin was an resulting actions will make and that as such precisely EBITDA full of investments because quarter of XX%, need these. than year, at level in result set the both still target quarter EBITDA Although, the lower third long-term of year periodic the to last of fourth

increases is OSB third the Now price business throughout prices. we’re for down when quarter, the partially lower OSB hold in quarter. offsetting from fourth the very growth volume position the the Holton these revenue Peace Valley, additional be will somewhat resulting particularly confident XX% Provided simpler OSB well average OSB online. actions about from quarter-to-date sequentially that with comes XXXX, sequentially

about in material changes we’ll So unforeseeable the factors, in should price above raw sudden in conclusion, unexpected or demand, be $XXX be somewhat caveats that, the given take the usual or fourth resulting with EBITDA other questions. happy And quarter changes million. availability to your for

Operator

comes first BMO Instructions] of Ketan [Operator Mamtora Capital the Our question Markets. line from of

is Your open. line

Ketan Mamtora

It you morning. of press the Thank of are because talk Can kind about guys is sounds I the back to volume seeing come more you drop like curtailment you side? start underlying Siding what good rebuild the you and that and here. to right a the bit demand little on you’re now. to driven what said capacity was want having

So you a I little that address and had bit can follow-on. a

Brad Southern

Yes, Ketan, and is SmartSide good The morning. still. strong for demand

file of still which We’re we’re year, next QX a managed all situation, file. means order on at this probably QX of into extending managed in or order really a least and year,

we’re So to production. selling

in QX, selling we we’ll less have QX in evidenced to that all and produce the expected sell happening we’re As downtime with and QX, than production to – in production. volume where that able and more move that outlined we’re

So strong. demand remains

all we incremental than could more if We had production. We produced sell we are it. selling

from shape good next when in and up and believe, in Holton running year really a will situation be, confidently. I second a standpoint, until the so of And we’re demand tight half very is

Ketan Mamtora

an EWP, it. of update turning helpful. sale Got that recently? Any And business has very you given been That’s in strong Brad, there how to process. strategy, the terms in then rethink provide can

Brad Southern

It’s question, Ketan. a great

of that business last particularly of quarter. proud performance year, the very this We’re

options in still to process. involved worked the last of the margins we’re around improvement, business which and margin for throughput, that in we and in but driven three increase EWP hard process some four are have has years business, We active still the strategic or the over the

on – with get if given our way strategically, been think even help the no we the very we being the has prioritization business evaluate lot, EWP a improving are part sale, to the strategic change really business the that a proud way do if though I get a in of obviously, portfolio, we business, going that’s change valuations performed, in good QX. there that the And performance we of hasn’t team So in but margin. to

Ketan Mamtora

very I back That’s it. queue. helpful. the jump in Got

Brad Southern

Thanks.

Operator

Thank you.

Weintraub Mark Our next of question from Research. Seaport comes

Your question please.

Mark Weintraub

very more And got little for you’ve that can a negotiating that there the And margin business. Congrats cycle up third et quarter. to first EBITDA pricing And type next strong following you a life relatively as and a with that out? see and Siding curve. EBITDA year Holton us relatedly, up But on customers the confident through a can process I in starting yet? in know, be how just XXXX on of the sense you the gone Have are give is of bit margins well? playing can XX% Siding cetera, we you

Brad Southern

market and year the for the have typically on we X. yet not gone first, So just planning our January price we our increase to with strategy to year. Mark, for increase remind are pricing I’ll time price audience question next that this

be And to communicating so that in market. December the later we’ll and November

our mill side years, year. were pricing, we’ve given with consistently given later So profile, process Houlton haven’t still some into compared have the mix focus good going the on feedback next start-up guidance confident for good and that’s gotten improving to the then to us beginning look some material XX% And think we cost pricing we and on of year. Sagola we where But think raw the next for given ability about to on margin year and and get on next we – XX%, product. margin year guiding we’re year the pricing begin we lot a margin a the at to that. our And and got of as about then to strategy, feel feel this in the next demand But that next headwinds, completion our situation year. especially I I the the I around we’ll for

Mark Weintraub

the very because And and South somewhat to the performance EWP, a versus this follow-up. of as cyclical? not trying reflective sense Great. growth and America changes in change then the think then to quick OSB. relatedly, is Thank you a not get strong that and that siding much in you. is obviously, how also also And business of just step sort and of

say, Entekra, what help So anything, you us time? And the Entekra Siding Neil what can obviously, can give that does think around which taking interesting, if that. is become potentially if maybe potentially is over you on business. about And some in

Brad Southern

Sure. over last start particularly the business really three aided the price this that the improvement, OSB, of some lowest let the me years, year. wide there’s Really proud with world is America. North no America. being Mark, the question, margin by pricing, price the South of

that imagine in we less in has kind to price South as when is ratchet we a down America margin will up believe price here in think decline in pricing be had of can moderation the the imports historically – there. pricing You do South performance But America us magnitude diminish they should than the there decrease the some some decline do price expect America, experienced to up from North in America. seen the think in of been But environment see in year, moderation had will South we’ve I do I North lot allows down increase or pricing this we which volatile North pricing there America we magnitude America. of a what and push I but of there.

in North American And and OEE that That and for been there. or Now we has aspect that there divisions improvement. crude margin siding is business, a lot made pretty a that’s sustainable future also good component that then for – capital that of of the past there’s is historically, business. of operational room movement though, our They’ve strategy really the aggressive segments. have scale poorest OEE improvement, over the down reinvestment year, of division a

on primarily We’re improved focused machine reliability.

with think obviously on us think I’ve just that. of know Mark, don’t America, we report South little validated we’ve of kind we’ll to of made change, South level to have for bring that year. really change out that acceptance. us. improve I’m a of on speaking is step I two very standpoint. I from business Entekra. in into there’s gets strategic there’s we I delivery to or equilibrium. the over And a continue Entekra I so said value on America proposition. a business to in quarter overall guess market that room On before, operations And needed. latency have step to but then pricing how we’ll the cost of pleased confidence for And past continue the really in a this a this a that progress and there’s call the they’re that to believe But but bit

there a very did one So on plant And over we’re One into mentioned couple moving then we that of call, in as the moves talked quarter. we made the we the manager. Badesto experienced our now of managers plant be Neil is we to the President. about, facility

resources improvement. bench. associated career lift of a on timing and spent in a And significant with doing his and really of put his same then have very Entekra growing that. of siding was to And to particularly, concentrated with record our place capable Neil building has we the great really it. tenure that So we want see to team a the is that sales strong this in Obviously, of Jason blessed think of business We rapid as a to very some strategic kind business. see the opportunity side business for we’re over right him kind track strong us. – portions siding of over

the of a business We’ll this grow have of to does feel says in it that revenue guess this serious getting question, So opportunity, we manufacturing we’re the – as But good does say million that ability as it that the business. about continue I Entekra. I nature continue competency It around about good performance and $XXX of year siding a your what well. Entekra. – huge getting to about really so see Jason’s we can we’ll really probably in

to year. EBITDA, breakeven the of the particularly We’re second half close in

I So, show business. the mean, from this capacity that zero, $XXX generation million revenue XX of ago, months does

get to creating engine done And as a possible. into turning that that that’s so And about that we’re growth is is job value. quickly excited as Neil’s

Mark Weintraub

you. Thank

Operator

Thank you.

Paul go Our ahead. next RBC Quinn comes of question Please Markets. Capital from

Paul Quinn

appreciate And Good the Thanks on I the Yes. extra really all guys. detail morning. guidance.

come So to what guidance in try just bit, which about start with that $XXX working get your the price in if possibility? have got keeping I’m X%. as flat, up costs on of to to volumes EBITDA is realm Is QX my around well million, to maybe million as a suggests siding, to revenues numbers of $XX around that down

Alan Haughie

Yes.

nailed You kind of yes. it that,

Paul Quinn

bounce volume does drop Okay. that And that in back QX, QX QX? does then in and

Alan Haughie

about we’ve that the easiest think fact similarly way a QX be in year just reported highest the ought much to of next Yes, The to QX. of level quarter very QX, so. sort is

with so back be of Swan the a go build Valley the we that behind maintenance will with QX it number won’t including this. was project Holton Given capacity online, in what projects, to

So yes.

Paul Quinn

programs then the big if us prefinished side. you could pre-finishing And Maybe of the of growth that you’ve one Okay. of some in give the is details got really QX. on

Brad Southern

Yes.

really seeing now supporting would we’re it. we’ve we’re constrained investment with SmartSide because We’re a right good that the and I good pre-finish, growth growth capital in paint also strategy say had on there. behind at really Paul, capacity of

mentioned Northeast Holton. operate, the seeing facilities we’ve last we a also both good plant the pursuing of Paul, currently the growth in – aggressively west. greenfield but in call, so capacity on as support in And saw increases the that we’re location on we actually, are start-up to We also,

surprised the by out I’m that. market acceptance little by pleased a there. very bit We’re

for we’re west. expansion some plans also the pursuing So, capacity

little acceptance cylinders and capacity would rest as I the side. our business to bit export hitting up the market all of catch as like the trying far on say So, a on finished

So, two we made there the we good last the years. about over feel really progress

Paul Quinn

switching over just the OEE investment results around to Or get down to there. add investment to mentioned pretty in kind just strong some then And South that Is further is capacity Brad, that. And you in Great. there plan all of further America? South operations the Okay. America, up?

Brad Southern

Paul. It’s both,

– we the second the were we we and of I’ll that in doing to other We we’re [indiscernible] but of level have we a sell not that especially and maintenance that are now. getting mill wanted to detail, all. OEE capacity. volume could incremental at the the but doing investment, just call let’s up, the press started We go made ahead some related in full ability, constraining that elements before validate it. that and do capital, that We the There train with line put with

capacity. So of capital down component there increasing is is the that there investment a

Paul Quinn

Great. Thanks very of much. That’s all I luck. had. Best

Operator

you. Thank

next Our question Securities. from TD comes Steuart Sean of

Your line is open.

Sean Steuart

you. Good morning. Thank

for CapEx the question plan. on one me Just

Sagola returns You two-part contractor XXXX for And the I how year. conversions lead trimmed this The siding with thoughts touched project? you initial of affect inflation seeing, move And the budget from guess perspective? the you’re any CapEx on that it heart ahead does conversion shortages. on And overall equipment as the question. your you for times, guidance

Alan Haughie

the the comes a is right. Thanks material for say drop to raw All ocean questions. returns inflation on in would when conversions. I of – it our the siding

bit So the on it but a forecasts, my occasionally means really. little it's noise. impact returns I'm that just No on off

to We're going year, $XXX be the that. is constraints in to still provided practical assist on of sort economy in other XXXX we the working our any can and with logistics aside, year. million we high but than next be the investment any more and significantly U.S. network spending a will luck, plans, logistics XXXX, For get

be in we'll Houlton Sagola and got the for the We've significant So completion of the higher. Mill the aiming investment Mill.

capacity years. of couple is for continuous the in the siding investment next So theme almost

Sean Steuart

that's had. Understood. Thanks I Alan, all

Operator

you. Thank

Our America. next John of Bank question of comes from Please go Babcock ahead.

John Babcock

down. as quarter why I or as apologies talk a short when morning. marketing, two? again, can Hey. especially like it guess that, and kind back for But, about you're you why not in nailing far wait and production invest to of Good so now siding just of just kind selling

Brad Southern

the is two growth to siding Good in sales in we expense There's marketing it pretty and them of QX one and year. of that components last question. cut severely

what very all, made some home But construction. COVID last different the strategy one, at that of home siding prefinished in in to also recovery strategy, with is on. back be that. of impact the on we just We not just obviously to cut new thinking home of a into had the is So run homeowner from export Ultimately, decision deeply involved the selling us choice calibrate on the finished a is that reality rate a been of year housing. is normal would experiencing somewhat that the QX

bit consumer it's So a sale. more a of

our so brand, as primarily brand and and And far sale placement finished siding. around repair our identity contractor and need about that a pre-finish export making getting that building marketing supporting, be focused prefinished, remodel, presence exposure base expense to is just around that as we national

consistent percentage required a an is historically to marketing standpoint, effective step So in with done marketing have repair or remodel what at but a from is present very in dollar siding. we've with it order and what

remodel East Coast, some a on capacity. to the side, well, it, now, repair the Now is your that sales a and side, extra credibility Holton a John, I think feel that little the got big how we question wisely. to judgment momentum marketing then particularly that following team oversold It in to the the capacity when time investments side It's spending spend. the – we're and with build what little up, of the the we and bit marketing support market. spend on kind like was, dollars take credible that so credible game, so. expansion, think part we that And question, on we've very particular, a have be of to we're that, I around marketing and of of was knows that marketing nature does be a magnitude do those honestly, do how now the that making while a around But to comes want when brand of so Sagola, ahead

expansion sales given the growth ahead of to minimal kind it that, be bit. of of I of any a it's capacity recent but makes and history of lot our we of would compared that like maybe in ability brand. do the investment get a But mistake spend size capital sense, a I'm support the to support of So feel of confident level our little and

John Babcock

more far? then realized so from much made Got EWP, just On last how be And it. question. my announcements that. Thanks for pricing that will you've have the to

Brad Southern

asking that You're that end market the... are flow through have like prices

John Babcock

last you as quarter. Yes. you obviously, pretty had realization like I mean, price – decent had

kind left next year? XQ potentially and how for of is like much into quarter fourth wondering Just the

Brad Southern

the nothing and I-Joist There's any longer, especially not the decline, and for John. given left competitive Yes. pressure on upside, pricing, upward OSB is the downward, lumber

John Babcock

Okay. That’s all have. Thank you. I

Operator

you. Thank

comes Yinger question from next of Kurt Our D.A. Davidson.

Your question please.

Kurt Yinger

Great. Thanks and good everyone. morning,

capacity possible? what's there's on production help double you Can ramp-up year? another growth XXXX. feet in curve us want Just realizing square contributing out maybe but off getting of to Is start just will start grow of system over volume looking QX, bit terms digits of there. to siding a realistic million frame a volume in into Holton next the XXX

Brad Southern

next QX. growth year. Hilton. other We'll But productive if I siding feel expecting going Yes. than year We we better the But expect for improvement year are I of next – OEE would we be kind mean, for haven't some mean, just budget into in next then footprint. improved take next that no on feet additional with our square see XXX a maybe million for our allow little I seen business. say, capacity the have existing contribution would the could for call. in for in say you reason and that I minimal to

credible in next think in year. in we'll production see begin some I and of QX manufacturing then and QX to QX

half, some should volume incremental second incremental meaningful some sell. to the we So volumes, have

Kurt Yinger

Got it.

million of couple the keep downtime some Okay. XXXX there volume mind? there to that could like kind think fair sounds production. Is That It maybe another as a maintenance OSB of square well? Or up of be catch or offset an anything in feet playing of on XXX from perspective, maybe is in makes mill to you're can sense. And that plan ahead get ramps Peace as you Valley then switching it OSB side. to

Brad Southern

reasonable for will won't be factoring you're speak sure and in make Sagola just then capacity, QX. so year, probably next a Holton take all, that's No, to we in down at there assumption

work there'll minus as conversion. bit little in well, on the a a that little Sagola, So more minus be we bit of of that QX a than on

Kurt Yinger

Right.

the refresh of about think past, talked about your being sheet a with mill. on But Okay. lastly, was maybe interest OSB reminder. change I In the recently, then I how That's it fundamentals stands there the future siding only guys. good any there industry flexibility or the that was M&A if with where Allendale on just you the you've of you you for hoping OSB announcement now? came balance us And just think opportunity view with can

Brad Southern

believe at I mean be that need in mean, convert interested look primary I us lot of siding, would Not we're we enable do it mill. Aspen would almost it opportunity, to We would obviously, a screener – to – but would any mean, we eventually an the change would be, there, mill Kurt. to which

Aspen we're in to Pine OSB So capacity We're commodity Yellow in less interested very our lot interested adding network. manufacturing. Southern a

Kurt Yinger

all Okay. hearing Makes sense. guys. the Brad, All appreciate and good right. QX, luck color, Well,

Brad Southern

Thank you.

Alan Haughie

Thank you.

Operator

Thank you.

Our next Goldman of Sachs. question comes from Maklari Susan

Your question, please.

Susan Maklari

thinking is, My about Good you talk XXXX? bit And veneers? how good the little you. can that as a on and availability congrats look to a everyone you're and resins quarter. first Thank to of morning question we

Brad Southern

North we've of supply for has of the we've a next to to week been secure our on the next are both doing critical America, work lot Yes. in quarter. year, businesses Resins It next and really for the as trying production, flexibility and – I Siding. particularly in pertains the I'm system but volatile, resin, reallocated way of MDI proud pretty really specialty to and our we've particular, optimize it to within been shown our

going think I challenging. be Susan, year to So next to is continue

caused Holton the minimal Texas, stay So have not we have as issues most And flexible. resin I and I going resin. at, agile but production far, than see, line we the think in at we're OSB shortages. with to we've right MDI to but next this but say we from think Coast, phenolic had true, us, to a the LVL which that result for phenolic is any commodity and our downtime the had can related Gulf securing would in freezers what to cause continue very have year to brings to manufacturers, as now, for any I we do we're problem convert we'll has have about we're with just to winter work – know last us of weather year. through could we – other chain where We're But disruption feel very to it's be good our to fortunate supply the

rather we So would plan, of those Solutions our we've got in MDI with running backup the growth. Structural be mills a though resins particularly good support

Susan Maklari

Yes.

on this can color. as helpful we little And spring ground up for from very and the about to then That's of the the inventory housing then year kind a where levels, gearing EWP perspective the end builders into stand. we the some of especially you about activity OSB season, and bit think things just as of selling Okay. talk the think

Brad Southern

been obviously, levels. given long not months Good as them last so, I there's but ago. six to inventory historically, certainly as if would the look the as say, pricing three moderation, would months it quasi-normal some I return was or characterize question. still lean, you

heavy I happens, a new with to we which as we normal. supply over low return the more go typically inventory Year situation into or the multifamily historically of be New we the time, see channel get don't slowdown any Thanksgiving though. building would the a between construction we New period gets could could to the it a chain remaining that Year. get building where time so by weather-related, stays of construction, normal I see a – scenario on And in construction inventory, see there's if typically the If strong. January lean winter, and – the around of side say,

– but too I channel that much I than available I we there's ago, lean certainly, to still happen. think six for the it more was as demand too think how on there inventory just there's year think But strong call – I side. the catch-up just well. this to more in months given would do And is started housing

Susan Maklari

you color. helpful and luck. good that’s Thank very Okay,

Brad Southern

you. Thank

Operator

to Thank the like you. call over Aaron for Howald time, remarks. to I'd turn At Sir? this back

Aaron Howald

this queue, There we'll everyone thank to soon. there. you and safe, look third LP's speaking so for earnings and forward morning quarter joining Thank Okay. call more again in stay the you, Lucie us will for questions you, conclude Please and are no with call. we

Operator

for conference This Thank concludes you today's participating. call.

You may now disconnect.

Louisiana-Pacific (LPX) 2 Nov 212021 Q3 Earnings call transcript