LPX - Earnings call transcript Q2 2022 | Louisiana-Pacific Corporation

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Aaron Howald

[Starts Abruptly] and other mterials. Slides two and three of the earnings presentation provide notices and detail regarding non-GAAP financial metrics and forward-looking statements. The appendix of the presentation also contains reconciliations that are further supplemented by this morning's 8-K filing. Rather than reading those statements, I incorporate them herein by reference. And with that, I'll turn the call over to Brad.

Brad Southern

Aaron. Thanks, welcome call and quarter the LP's XXXX. of to morning for earnings second Good continues results to strong transformation ongoing LP's deliver growth value quarter with and creation. of very another freight, LP's growth than inflationary raw pressures quarter. We in cost more Alan face later, materials offset ongoing and discuss will but headwinds for the these as

This Siding a broader Solutions Solutions closely, so products. record. far we in Commodity inflation, year-over-year significantly and rates, realization especially mortgage for very products While portfolio the is of the housing the hit demand quarterly have demand sales, economy more fell prices seen $XXX few LP's steeply of through improved segment. are price grew million at watching market signs for XX% OSB reduced quarter, and value-added for margin the and specialized true another Structural which we offerings. OSB LP's specialty is a but to higher with

to OSB algorithmic Through the Solutions As a a of square over have quarter. in this moment, especially billion in second earlier result, capital of give for reach the to by but Logistics total via will faced minimize Structural we've Solutions remains our and feet X volume we XX% first shareholders products. somewhat guidance increased XX% challenges of logistics-related volume I LP dividends update helping revenue. in LP delivered eased has XXXX, outperformed to half Structural British year, our Columbia, somewhat, downtime. team share detailed cash returning operations a allocation repurchases. committed more

compared schedule ExpertFinish, in investing ground Siding work manufacturing press little QX through of Maine dividend approved buybacks. and on to revenue newest billion about almost late The and of New Siding bring this when of fully in mill that in square summer, starts XXXX, produce six were like ExpertFinish, OSB flat next returned products Siding Earlier prior XX-month grown and to And fastest-growing Siding's from share LP's SmartSide By single-family contributed XX% lows. ahead so of quarter, the of quarter starts XXXX starts Michigan. per goes far release. tend are trailing to period, may to York just the second applications starting hit In to were second from rebounded this the of contrast, XX% basis quarterly year last The pushing portfolio to $XXX points That in volume customers QX Shakes, Corners, chart LP's construction. a committed COVID and by is LP's Sagola at prefinished period. the new a single-family This in ramping revenue continues feet. total shows shareholders QX more LP on to those the Comparing over X%. QX Siding Friday's same diversity In to about we QX multifamily is Only bar price million, growth. higher Siding applications continues under Sagola we another volume XX% $X.XX only a specialized volume LP have have spent component products price mill on has remodeling into remains $XXX point. and generally to Siding up as repair shows in the single-family and the under of combined innovative housing be more Siding products at Siding three Houlton Board in schedule. new down capacity Siding Siding. BuilderSeries. as of Solutions growth. products X.X that detail of go revenue. presentation The and The of Directors is to year. fact records, Slide XX%. given of up Bath, facility operational, on surprising, The about both growth broke in hardly XX% volume have seen you XX% of and the for prefinished left million served

$XXX Let me process, brief LP's and I-Joist August, was committed wood sold about fees the total the we smooth word the a sale The proceeds and million. and also engineered investing joint other taxes who add in of before Monday Xst Resolute business was closed the to could to of in from buyer the with EWP products adjustments, the a EWP that venture safety, ensure right a for thank EWP including business creation And the I value XXX segment. its to last tag. divestiture EWP for Throughout that the for the transition wish wood successful the service. owner nearly to people unwavering want Pacific thank Tech, have employees. this a found and the shepherded service I have believe in Wood many team process it customer conclusion. Pacific also and We nothing, want EWP success. who years employees we their at on but I to customers all focus and equity of

for with divestiture specialized, new ongoing growth exceptionally construction this focused, is and forward dependent well complete, Looking more LP and less more on positioned innovation.

continue of is present. guidance the and quarter to and innovative turn will updated in one LP's creativity, a I determination value the reach future our build is industry, and Alan we incorporation have will and I delivering customers am its that LP shareholders. XXth of dedication more for LP to exceptional ethical of ahead injured a sustainable our full LP on on for that our July. past and specialty to in our transformed. And high-quality force Thanks that review anniversary for QX milestone is without impossible building few has financial that, us. employees countless an Today, the bright history companies celebrated results with detailed our the year. all LP That and and confident call Finally, XXth and for solutions over the of safe of and of to them a

Alan Haughie

joining Thanks, Brad this you us and thank all morning. for

I'd results, and quarterly to bring successful echo thanks like to the employees to comments to my Brad's proceed and this conclusion. EWP helped the who we process personal else own Before a both everyone to add

the completion for nothing divestiture than say Let the the means part that quarter of financial of EWP. discontinued that of the avoidance been me else as operations this have And classified also results there other segment doubt, discontinued of operations. EWP in in second was the

of Solutions, the healthy, of OSB growth with the Aside than the products second divestiture, the offsetting share continued to remain shows invest we for repurchases. to growth story in both of return more highlights for of LP's significant from is headwinds. course, seven the and And cash specialty the EWP Structural quarter. demand presentation short inflationary Slide the that and shareholders quarter siding via

share, without ease was For $X.X EWP. continuing from Net with year. X% per are down billion and of earnings sales operations from comparison, and both showing EBITDA we of prior the

describe last call investment on from price square commissioning of feet ongoing and results. of which was our favorable lower points by growth and EBITDA percentage totaled the spent in drive quarter being from to increase Capital covers However, of million earnings made SG&A all increase largely increases was hit and inflation maintenance, facility. another Raw of million point Investments from operating mix. compound on of deliver last of waterfall continuing $XXX Siding full of quarter moment. to the regular as will announced EBITDA million demonstration target million in was eight invest in possible with of largest in on which our to volume incentive efficiency. two final that the for wage in OSB the costs ramp-up and of reduced of third took strategy XX% clear Sales ongoing year the increase compensation. to $XX the a Compared list Slide to volume a million XX% and and million $XXX XX XX% inflation our July million price sales operations. volume $XX million, $XX future year, full adding the This two component another record, quarter Siding EWP's to operations and XX% of by on a EBITDA from was the top to effect price, of expenditures same stands I'll midyear as combined increases due million points with well pace from $XX Houlton increase of of Siding. freight further and a price X in the as action in are in of now million quarter the $XXX about growth of shows our future year-over-year grow lower. material $XXX Please $X the continuing performance $X Houlton reflected note growth from be million plus, strong EBITDA. effect was prices, a in one, product the in XXX innovation. LP

ending should OSB, raw the nine year-over-year. shows to result, or fell Slide lower fall, margins prices we preinflationary quarter, a see and As for exceed throughout if levels. XX% waterfall when return even which steeply material prices the for

Structural price improved in volatility both realization. moderated of Solutions However, impact significantly and the growth price

results. in Solutions, from were Valley, of margin constraints, quarter X% volume solutions by structural XX% of shift from XX% Structural operating impressive the by assumed of fact, mix, to the efficiency. the a This drop higher in guidance, fall the has length the year. significantly yet price not ended which algorithmic structural net XX%. quarter at the level helped mix And rate Combined increased fell the and last volumes operating year deliver a Peace commodity dampened lower to In Commodity respectable second this while increases last resumed have lower of the to may offset OSB to Structural nonetheless Solutions prices half our year-over-year. EBITDA XX% solutions in logistics year, random effect of prices with below XX% is this

of in Solutions business million began year. reductions LP specialty Barrier shift lower Houlton Solutions and and of commodity everything OSB Structural strategy impact Sagola results. words to from double million $XXX moderate the $XX strategy, EBITDA EBITDA. in and growth to they not this cash raw they of any strong can $XXX the to Solutions. Siding LP contribute growth June quarter Structural prices. help specialty specialty balance will than the spending though did Peace raw The be at control Much the volatility, points price are by to material seven the in due flow year-over-year XX% lower with purpose repurchasing better in brought for benefits particular but XX $XX quarter second performance TechShield in was and due in $XX balance enough products other was all of such recorded just EBITDA to million the to OSB nearly partly LP's a of taxes Not as million and transition our from supporting Even of This growth XX Slide of less again prices. shareholders our million LP costs namely $XXX million. earmarked to was last premium Solutions volume offset experience again $XXX products shares. the higher mostly flooring increased cash to million Radiant only exciting OSB which conversions, earned XX too of from million and divestiture full netted percentage However, receivables partly lower quarter. drive Structural the capital combined But of sheet. ongoing the quarter for after things to quarter, volume OSB, from for total makes any CapEx million, total stuff by this obviously volume reduced could. commodity these besides. taxes we fees but material OSB to Working Proceeds in prices continues summarizes commodity with the Valley, system-wide the funds a make the impact mostly material inflation, third from hit inflation EBITDA. XX% Structural our $XX on else returning OSBs paid and $XXX million, summarizes second to cash allocation and $XXX Slide more the capital describes the continuing EWP $XXX raw than an this already $XXX Those our flow an aim portfolio sustainable. cash a and for million $XXX to million of cash impact than in operating million operations. by

which to in let million share update an share of as then, as second capital quarter, X.X bringing of shares. August million million count was million XXth. $XXX further June Speaking Since a million Xth me for the repurchase you million Having allocation. XX.X LP's count purchased shares spent our LP's to on additional shares we've of X.X XX.X $XXX

million $XXX and in our and capital remaining have the Board We prior driving remain the allocation authorization motivation unchanged. strategy

return in similar of to stress follow meet any as expected is Structural mill growth do while are and quarter in third about share line with growth for Spending for be demand, balance million a to macroeconomic Siding in sheet Siding investments spent in items plan been specialty The to course to We continues to our brings for growing $XXX more the invest million year. of earn to no $XXX which capacity into so to see in of will and decelerating earmarked occurring we of on of full that and million is to these XXXX. to for the for year. cash the we offset Siding lead-time that growth me we unnamed the of $XXX very second vast that below and first SmartSide to OSB quarter of after in Sagola, continue will first given The $XXX LP our trends inflation. is of million in million year second long already meaningfully for $XX major must with price this necessary mill And are third But I than shareholders remains the We roughly the has the the that and be full LP's uncertainty. XXXX intrinsic that and Sagola expect strong value. quarter maintain Houlton, in products of to should that remains our still long-term signs conversion the guidance Sagola. cash quarter those and will assessment order the for we conversions, In for range CapEx despite performance of which expected remainder majority bulk continue half for it will spend the schedule yet Solutions. start-up drivers

XX%. our and raw of growth about previous of XX% in the expect second and quarter we margin are We EBITDA margin Siding Also, in third Siding both Siding our full OSB have while July. of growth stabilized reiterate material impacted Commodity EBITDA we long-term in year the of prices guidance quarter, are for revenue affirming Siding's inflation at but target sequentially at least XX%. year-over-year, down least

we'll as second result, quarter the revenue algorithm with same but the OSB a updated guidance, for As did for price assumption. use an we

from in would bring operations questions. $XXX continuing million. take for with third flat Friday's happy of the sequential are And EBITDA a prices of length random see last be we'll the about quarter Assuming This to reduction levels, quarter published we remainder at your would XX%. that, third OSB to expect about revenue to

Operator

Thank [Operator first from coming our question line Now of BMO. Mamtora you. Ketan the Instructions] from

Your line is open.

Ketan Mamtora

morning Thank Alan. you, good and Brad,

a can destocking inventories question, First categories. bit seeing building talk Siding We bit are in you little the seeing the that about you inventory product are quite business? in of a some channel

seeing kind curious just was I what are Siding? in of you So

Brad Southern

channel lean are inventories still to as Yes, our experiencing very Ketan, relates siding product. we it

very on change getting still managed at distribution, file the the last lean of order now. so we're helping is two really you Certainly, now, know no but As Houlton since call. been we've some inventories to volume close out for years we're running

Ketan Mamtora

little some with talk then Alan, wondering just as balance about the if over And think you if helpful. quarters? was can flexibility I to three versus about how market cushion a or my repurchases next the were you share liquidity That's two it. keeping bit follow-up, Got slow sheet your

Alan Haughie

I'm great sheet balance that extremely start And you. have Thank Yes. strong saying to an question. today. still going by we

I keep very of place. million $XXX which have high-yield intend We debt, cheap in to

revolver. $XXX million undrawn of have We

that needs share the in of our we growth I'll in we all the call part huge share pass cash We first of shareholders for the a a but it any the capacity basically And cash investment And we only have I whereby to in out first, sort to safe need times we it be of that devote forms to a of business remainder of terms what has want future remainder reiterate should earned as borrowing not is plans. buybacks return to growth. investment at buybacks. strategy safe via

So in that have ability position our business also without the in compromising we us handle I should believe sheet downturn in question the balance strong very invest to And no today growth. that incredibly there's it to comes safe potential first. any that investment to a continue occur puts

Ketan Mamtora

queue. helpful. back I’ll All That's in right. jump the

Brad Southern

Thank you, Ketan.

Operator

our And question the Maklari from Susan coming Sachs. next of line from Goldman

open. is line Your

Susan Maklari

about Good peers. seems year product about morning how is get for material the it see back any talk we've volumes of then can My you. trended guess, of broader it Thank the half into slowdown outlook from like quarter question didn't everyone. which the and quarter, in first you environment I XXXX? maybe thinking and the how as as your early Siding, perhaps, relates building into some especially demand thinking even the about you this you're we heard

Brad Southern

inventory order way Whenever in Susan. essentially quarter. certainly We pretty been we're the other Being and take customers, have able regions, much regions demand. that weakness had experienced of other distributors, available have file, our other we've all strong or oversold this Yes, we throughout up on year. channels, distribution on very of order managed stayed that patterns one to

of And year. the of continue It order to bring we as in I as we're -- expect we mentioned so ramp frankly, Houlton kind volume. as certainly, not will will for of be we slowdown reiterated rest in this that year. as of that rest any this patterns to this Siding extra help to year, all. sensing continue at up, Alan And look Ketan, for selling the remainder capacity certainly and having really But the we to into guidance, the

a Now and we see been next have we budget. into next growth extending looking Once to the you we've strong Sagola be process recently up those planning But us have the will get and and XXX% beginning are more over running, ask and year's very for And into the ramp-up year. again, Houlton continue you capacity XX% really for to we increase we in XX% than from that -- for sizable -- to year, a year. line. next about in start about also X%,

that we'll like, offering. for given next the And still feel be then we'll But to the very I diversity the we the operate what certainly So happens there. running half we're in capacity of of the use then channels end and geographic diversity, about diversity see, of customers, within first optimistic our our diversity Siding, year. from product

we're steam running So ahead. full

Susan Maklari

that following that in bit mentioned side? seeing in see you're And some general year? Canada, Okay. That's on of you chain logistics quarter. half a about this those that, then challenges of back the supply ease on very talk you're about, in you inflationary and color. what up helpful the you how And the did for thinking just Can

Brad Southern

raw QX. the been availability, material unconstrained has So mostly in

of we've that had So availability supply.

Similarly matter or a we to logistics -- more in a ground limitations of inventory have can to that related we've in just facilities, side, put there. QX had would goods you the Alan how and Canadian downtime some in we and finished experienced as talked on is Canadian it much we different if go about railcars on take little -- QX, inability early where the we the like. where pricing trucks can on certainly course Of and get detail the to Susan,

capacity hit we have So once the those constraints, we to down. take then mills

and we by and QX, potential But for get say, produce. flowing keep There been daily rail every get able under today, certainly especially the swapping weather associated We right into can it's now, product second rail able to would further a have or grind. truck on working year. given risk I of depending basically through speak the have diligently, equipment half with been as for we're the situation downtime conditions, load later is to for we we trucks as

Susan Maklari

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

Brad Southern

Thank you, Susan

Operator

of Our next Securities. coming question line Steuart Sean with TD is from the

Your open. line is

Sean Steuart

couple morning. inflation margins catch of on you Can cut magnitude you, QX? of of there And that the into remind A Thank questions. be much price this that in segment could the given quarter, hike? us to all trying margins at the July if just how for good Siding cost gauge up

Brad Southern

increase Yes, Sean, to depending we X% region, depending X. went out on the July channel price X% on

fairly that agreements by place of expect that sticky. a quickly. realize large that of have matter delay it's that most to we it price We but it There's weeks. increase, is some can in not But

the So we we to time get expect the to it quarter. by the pass-through certainly end of

Alan Haughie

material just second was I to experienced raw margin of and that we of the per inflation in raw about the to that would of XX% a mean margin. half with with enjoyed about increases quarter back impact long-term quarter the half cost our I impacting to guidance. about have them we – – going the let's the took the respect business if over of think the running which $XX Siding was – is I part The just is inflationary quarter that year-over-year been second sorry seven year-over-year then at question margin. material to add respect of pretend you that points of million

So still the healthy maintaining very margins. and business is carrying hefty a inflation

call the optimistic an we'll upside it margins siding we So see in a upside permanent we are material that should raw deflation. there's

Sean Steuart

Thanks it. for that. Got

getting second low still this is in over some the you on possible -- can OSB some enough cost half if the be cost at the have cushion point, mills sense there wondering where your left? sense at shape higher might are question, some the downtime the at might you point any of of this or comment And of curve. industry prices be necessary market-related year. of Second Brad that What I'm that

Brad Southern

from just of paper forest me flat. paper in is relatively let Well, guess, the think, products to comparatively, when some OSB's cost mills. cost very rather be career curve my curves half curve -- OSB perspective, steep say, you I I a those get In think, where I bid small can side cost of

there -- smaller not operating few are if mean mills a I stressed high-cost OSB and are would there's So that be still fell. that pricing obviously

I year, issue As into in a like that significant really demand -- the believe risk. the weakness. look order of second half I is at any it's that capacity that right our Sean now OSB We're file not sensing

And then happen could pricing, speculate I down. impact through can of demand at have so want I see a early to weather we to that XXth we building through you lot get least could an would And that January could of later staying that get not on keep get year once the the but demand if as the know Thanksgiving to the OSB as and ratio on into on stable fall. to also depending holiday operating that as decide drive season builders impact of the we kind

we're pretty where are we mean of selling was demand I some demand. build we but is of think Inventories summer we're work in are today allowed yet some I feel inventory for little a about been do there that the channel. answered -- we question there's over I have fall bit season. don't we've now to that for think rest more the the -- through right balanced and pretty, underlying as the So OSB good

much pretty think I inventories in balance. are

out so feel get into we that the orders market. going right are And the door in pretty the we confident

committed demand Now let or to operating our committed capacity. committed line OSB to our in not or our locations they product order that We're me customers to we're in our to just keep off-site inventories say against facilities. to are the on supplying balancing OSB need. we downtime, And for building location

And we later see as part demand so year we get we will do next year. of the how or falling the that's into first behave if

Sean Steuart

very Thanks excellent detail. its Brad, much.

Operator

for next question. Thank you. moment One

from coming question the next Weintraub of Mark Our line Seaport. with

is line open. Your

Mark Weintraub

you. Thank

Just a on follow-up EBITDA margins in first the Siding.

the the variables quarter any take the where seen or the midyear if other great And you margins sort that in second somewhere critical color longer-term so of on to where half EBITDA too. imagine half the And be terms were and be that XX%, you've of in margins second that as would the any inflation? in to come climbing And change incremental we so and increase the Siding the might the between what increase in impact color the of to far price and Do they out towards second year? were price XX% in expectation year? likely of would

Alan Haughie

Sure. Yes.

market If Given the raw is robust, question the guidance. I sticky. material from price the the else the costs give the second always and well-received quarter proving pricing remains answer a will say rise raw -- the been sort I'll answer Siding in I'll increase if that price material has -- levels and everything we don't prices about way of our on forecast relatively

so. would the material You slightly raw if worsen, above XX% or margins see around about, prices don't

Mark Weintraub

you were the second at raw And how quarter average things the in to Great. as where that? date versus would side, today on are material characterize they where on you look

Alan Haughie

I would that question characterize answer right that refuse to now. going as to I'm

Mark Weintraub

Okay. I you. will get Thank back in queue.

Operator

Our question next from coming the Michael of Roxland Truist. line with

open. Your line is

Michael Roxland

Thank questions. Alan. you. and Thanks for Good taking Brad morning, my

Brad Southern

the call. to Welcome

Michael Roxland

order question book. One Good to your be on here. quick

have you for order that years. the mentioned couple obviously, managed of file You, last

to orders? to the see any How line far in back since is terms I mean, demand? some that slowing to you respect of that given what indications now. what's the as of there with -- your how couple it -- in you do your should get seeing -- start this the half have OSB indicated weakness Are months? in builders see a sight any particularly you is could You're orders far of of extend year Can start not it they right weakness of weeks,

Brad Southern

Yeah. Mike. good That's question a

for So on siding, good siding. lenses we have out six for weeks

out when on order of way nuance the in strength, just siding got of book. file we're managing that good so the of speak we've visibility And I the kind pretty order

weakness So just to the at six forecast no say all. weeks, four let's in

have OSB. probably -- more order right now I And is are X% window to we're three that three We weeks on two say than weeks to selling out, Typically X%. shorter would two.

so of were August, have visibility out it cliff, OSB. And of fall a do is we if that far things not for here September, the say, Xst middle off to

a in more demand. shorter -- to lot a we're file so bit more a little order So little downturn vulnerable on in OSB

Michael Roxland

Got it. that Appreciate Brad.

then follow-up. and -- Just one quick

inflation priority for anything commitment left and over being about have But -- going is return repurchases impact to the it's pass think how investing at, X%? that's to all you reduction the first, the allocation. and taxes Obviously you repurchases capital Does to share at that do to share then return? how which your You is intend mentioned, shareholders. looks capital in much given like business which at

Alan Haughie

I'll the current all. in our compared hour to of of small That No, half our at not strategy. and X% That's capital right a gap exists we that so the consequence it last to I've share call allocation value intrinsic drop that ocean. X% looked believe as not the is now, between tax our is even in price no

Michael Roxland

half. second the in luck Good it. Got

Alan Haughie

you. Thank

Operator

of Kurt Instructions] Davidson. D.A. you. from our question Thank coming the [Operator Yinger And line with next

open. is line Your

Kurt Yinger

you Thank good morning, Great. everyone. and

what's my Structural difference of the Just production Solutions way a to about commodity cost perspective? in terms costs, on OSB and from cash one first best the think between

Brad Southern

how incremental variation commodity. depending to is sophisticated on side a cost, Solutions lot of the the product to Structural relative on there's Well, the

$XXX looking to So know don't say for and plus. would around well; adding, $XX at I $XX we're claim block I

additional $XX So but of a portfolio, at there's somewhere our I'd between just of to say looking lot cost. $XX variation,

Kurt Yinger

it. Got

production and That's what you of out given year? is just OSB help second, Okay. Valley looks on the the think about And on side with annualized my picture us Sagola like where helpful. Peace then could next

Aaron Howald

Yeah. Kurt.

So pretty feet, billion the and would the Sagola we to be four close effect total Peace Valley net edition of from removal square with system.

Kurt Yinger

Got it.

Thank the all appreciate I Okay. you. details.

Aaron Howald

Yeah.

Operator

next with Capital. Thank of question, you. coming the And Paul from our RBC Quinn line

open. is line Your

Paul Quinn

Thanks very Good much. Yeah. morning guys.

full Peace Kurt's at year mill you question about Just that following on up right at Are ago. a we Valley, on, now? capacity started the

Brad Southern

are yes. We Paul,

Paul Quinn

on delays -- adds mills about OSB XXXX. at then paper you American some that in are to or up? customers there expected of the channels another seems Have the those to the looking heard market And a XXXX there's Okay. and be in be then, start of North quite itself, might that some few in, just anything couple from affecting capacity

Brad Southern

just to on in don't we're for it be specific I OSB, would reasons capacity more depending I be those because but variety the of additions project. hearing hearsay, would want delays than of say expediting a generally

Paul Quinn

are to be here. general, on then, But And it rates it it's and repair six up like how slowing beyond? thinking housing only leveraged to with But I here Okay. and on sort it remodel market. about the that weeks Siding out. the in side, seems of know you to your four market can more seems XXXX support slowing jump really you're just search, you see in although for that

Brad Southern

prepared the will on We call we the remarks We've well now feel adding running order right at of middle are of pre-finished We're We're good next York operational about Bath, facilities. about in year. that New -- capacity pretty on Bay, Wisconsin in capacity file. running facility our managed talked be Green also pre-finished in much prepared remodel. the one our

those believe are that on constrained of an constrained that will so part Bay have Bath additional pain we capacity to business is our market Green acceptance the and in growing -- ability capacity immediate the not remodel. constrained. or grow We And market at it today on impact that more do

out was a up sorry as facilities, contributor say significant out pre-finished it be we to growth we're so to next get the repaying could continue growth we And we could have ramp And story remodel momentum our this turn to good will turn some that, I just that weaken to these housing does right once if we have. could -- in still timing for it that expecting year.

to Sorry interrupt.

Paul Quinn

No Yeah. worries.

you. Let's for out hope works that

Just lastly us update if could give just you there? an on Entekra,

Brad Southern

Yeah.

repeat what progress in customers continue much I'll in market a acceptance, coming is to time We to Entekra. make said -- pleased back pretty very quarter just for we're customer second more volume. by slow with I similar the last

at pretty improvements improvements. has continued much pretty of system the issues seeing our the on working through operational cost -- to now. mean We see And are the facility. need that we're side. business there We I much operational We're into side LP taken

that have strategic Paul. prices we rest with Just see pretty to earnest cost EWP in more we're the on its improvement also really bullish to language the to on portfolio when operational side going about we're running some not improvement -- have been lumber months opportunities the -- on next years wanting businesses. evaluation And and business. We'll And X.X take and we I'm the business there place the a it's rent beginning but say reviews, back a through we'll we'll see going been -- that in that certainly operating can into And imagine and next I have mean are intensive our what the of volatile capturing and this to that. of as step three through understand, We're it's over to time crossing you strategic year pricing about to get call we next November. facility But we that for still we're and positively in the general. implement probably have full try have talking year. of EWP we're

feel to can to like that want viable operating make that an need to us. perspective, business from Just progress we the continue make make sure for we a we

Paul Quinn

of so Thanks Great. Best much. luck.

Brad Southern

Thanks Paul.

Operator

And our from of Seaport. next Mark from line question Weintraub coming the

line Your is open.

Mark Weintraub

quick follow-ups generation. Two cash you. on Thank

Can to $XXX etcetera. be? you think us EWP, for some million the give you going and fees proceeds on then be mentioned are that's and there I to gross in the what So, likely net taxes

Alan Haughie

conservative proceeds very to taxes going here. around -- net There's about $XXX sure. million. yes, be are million I'm for The the after being $XXX roughly Well

about $XX in and say, and million than will taxes and a less there million. fees $XX little $XXX over adjustment Let's be such the that of million on of

we On received there's payable. million no the JV from taxes the already $XX that

So that's and free clear.

Mark Weintraub

Okay.

already of year? you described the in million the first so so the showed half And up $XX

Alan Haughie

Yes. right. That's

Mark Weintraub

to us likely Okay. CapEx a where assessment is give you on preliminary And then can be next year?

Alan Haughie

magnitude Certainly, little as it considered, a this year, bit of the not same maybe lower, things meaningfully. all but order of

would this $XXX I somewhere early between million. say So read point at

Mark Weintraub

Thanks so much.

Alan Haughie

me raw things improve to if -- want material get -- Obviously you sorry All let you allow back I equal. you're as for my if gave go while just being of being on abrupt question. was. as the I see includes me on and answer $XXX a to million we of experienced the third material that say. very, to to -- I'm inflation Mark, the million under in QX for level seen modest threat We've from about that uptick very, $XXX of as that QX, no now very business the of year-over-year raw same QX. about right let's the the of quarter signs that's guidance

to made that about today. assume same at we're running as level the So, of it's

Mark Weintraub

you. Thank

Operator

moment the next of our coming George Bank And Staphos for our One America. next of with from question question. line

open. Your line is

George Staphos

Thanks. on Hi if for talking you number thoughts change Brad color seeing what with XX to XX you relative what give detail. on everyone, and saw us bit with put Any next Any a you're lead Houlton about had you times Sagola? of in And that good are Alan, on months you're mill Sagola you'll seeing presses we next siding there? morning. what the to that? with a and the it, months? and could Thanks of for all terms the see equipment

Brad Southern

that time question. next with did support the a is great George, lead for after And our early the procurement conversion -- Board fortunately Sagola.

not risk critical to of queue we've So equipment on some kind the there. that. we in for all gotten wait on the feel good that Certainly, our having delivering schedule, there's

to don't much components where were pretty with we the are there's proactive would So But locked getting, about in want delivery those not. that cited we we order I no schedules. next mill, the say matter

timing there But So, delays mean issue. that. timing push will not be certainly it be be about feel our we're that quarter. not we could It right to I now, delay. a expecting good that a a vendor-related

George Staphos

I'm Is for there in wanted let's weren't or proactive you obviously, the that Siding any as plus I like looking I don't assuming else? want assuming else in know, say, to well? as say, what knew doing, doing somebody What of order at front. anything business, press might way Siding queue, or as for as that get I If they be I a to two on what I And terms end would the OSB equipment? was years look to

in you're just So worried. case,

Brad Southern

at most and would minimum. do in probably do to a like if got after to they -- exactly would Well, queue, you're be we to it use to have you use we vendors use, -- it, you've going well us the the

depends a lot it question, new nature of though a conversion whatever. mill is mill so And or or your a the it of

-- I sound, years reasonable. mean that's head. the two So, But think I off just I'm I my be your right would of just mean, top

George Staphos

versus at in the question, past, this No, I you. with of Brad. you've that the to to I think be ultimately run, turn grow talked to in patience the just about there base-level terms target still level appreciate what but -- of a this know in to OSB, is perhaps, the to you Structural OSB you structured is need talked general expect the past, relative you've Siding And in XX% solutions the some Thank point? versus Solutions base you business?

Brad Southern

Structural XX%, we we've our our is In set target. launched Great question. we which XX% next when strategy at now Solutions exceeded. XXXX, it

XX%, than believe I to that XX%. want greater you volume, it's we do always be change that's on And now believe some or there'll as commodity on I going XX%. the that George, So new commodity to downtime. get don't start-up a goal mill to. hold And kind when optimal be we There's after some of maintenance underlying would SKUs of to volume, there's

of Solutions over we're that percentage don't I high converting time. will a very be zero, number at Structural but looking So think ever

George Staphos

on much. progressing? so just in macro I'll how matter any missed it, early in it quarter, Okay. it And perhaps mentioned Thanks And broadly thoughts but your quick relative Any seen the South I to is key more turn you've for that you things demand that America and markets? and the over.

Brad Southern

Yes.

countries a across So, of chaos offering. well capacity. pretty our some do really or relief chaos strong about we that for diverse America, there, economic word. economies out then through we're down fairly is some operations. might so extra production there and on that's diverse have the South but very been export in demand going South we on held valve, in American there bit And little we've But running a to -- business the that of down up the a pessimism, as has healthy use product of be political fairly There

to more our export end good being about to up domestic. and volume of that produce then, basically the we a with margin. does to better to location. able it capacity feel have That's us margin a the continent keep internal And South around It's balancing demand, is I America what volumes. So higher doing

I half. what far in the been holding in half probably to your and so, saw question so as as the second so the quarter, But optimistic it's first far, say, we would And not okay. up

George Staphos

I’ll Brad. it, over. very you it turn Appreciate Thank much

Operator

to Thank Howald, call for remarks. you. any closing I Aaron back now turn the will

Aaron Howald

to much. Okay. speaking second Thank again earnings bring day you and the close. for you, a quarter look questions, very we'll Louisiana-Pacific, no soon. your to everybody. great more of Have call With forward rest we'll a Thank

Operator

conference Thank Ladies for and gentlemen, you our your conclude that today. for does participation.

You may disconnect. now Good day.

Louisiana-Pacific (LPX) 9 Aug 222022 Q2 Earnings call transcript