Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. Welcome to the Q4 2022 Louisiana-Pacific Corporation Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference call is being recorded. I would like to turn the conference over today to Aaron Howald, Vice President, Investor Relations.

Aaron Howald

Thank you, operator. updated thank the joining year fourth as as and LP’s to of everyone first well for the results quarter our morning, you XXXX. us for discuss XXXX quarter Good of for outlook and full

my Relations Officer Chief As Investor Brad Howald, and President Business Southern, morning and by Development. LP’s I LP’s is I the name Officer. Aaron Executive LP’s Alan am Haughie, Financial operator Vice this Chief said, and of am joined

we investor.lpcorp.com. podcast, that and refer call to LP’s presentation conference morning’s this accompanying will is IR an During webpage, on available which is

reading Our there discussion X press reconciliations that will filing. earnings is on further morning’s presentation. I The financial the statements, X-K Today’s statements release reference. by forward-looking described this Rather filing and non-GAAP and also incorporate are contains along of herein of the also X-K with X contain appendix materials. metrics than these available supplemented by presentation and them other as our Slides earnings

And with call over I the Brad. to will that, turn

Brad Southern

Thanks, morning, everyone discuss repurchasing delivered joining to XX to siding we call and XXth earned Good fourth and including billion in LP’s returned you $X.X and nearly thank volume $X quarter XXXX, conference year our LP’s full record for year, EBITDA shareholders, results. and In Aaron. billion million shares.

prices and and levels XXXX. Solutions OSB siding in conversion grew Houlton mill, and we sales not EBITDA our to of starting net since finish solutions. our invested also to despite the produce In of transformation our QX, by seen in Sagola conversion completing We XX% OSB positive structural capacity Siding export from falling by ongoing the remain to growing

delivering that products and report. our positively to of help audience. communities of year also employee impacting value that and slowdown possible. likely is customers, every of the everyday. most the LP inherently I and want carbon-negative thank starts to environment is contributions It was Another publishing second whose and homeowners the while manufacturing processes, in a housing truly make LP meaning shareholders efficient top highlight The sustainability for was remarkable year LP’s mind recent

So relationships the have underlying with saw starts OSB starting that full that market. siding LP’s different XX% were that, of for very closely with correlated me residential starts a than LP’s OSB year. with businesses fewer XXXX QX and construction. QX let address down and single-family in is segment XX% new single-family reminder

to commodity of QX remarkable prices As in a generation, fell starts. cash after as demand result, reduce a slowed OSB cost year housing near cash to

and more responded to EBITDA disciplined connection best channels volume to to other our users, no in LP $XX the has management construction specialized, and has We the algorithmic and product more is our segment, on new is million which of guidance significantly siding only with given how segment end allowed hand, and above diverse capacity going prices with far of sales think available. commodity fell. SmartSide we about siding residential XX% prices team, is earn the Siding exceptional execution OSB by which

in consistently by quarter has market full for outperformed siding the result, housing net sales year. increasing a the the As XX% underlying with XX% by and fourth

December inherent we This time to our due the quarter, resulted some continue their lag fourth seasonably to end, will the the have most customers pulls unaware customers’ up inventory managed By therefore, and inventories guidance talk were SmartSide order, more bringing normal until that finally which of order section. back customer quarter more demand a but distribution channel the of In siding lead to about Alan levels. file. times in caught to in in products slowed. build in late

same but X-year flat housing to Siding has Looking then is to fell slowdown, revenue XXXX, essentially Over have XX% immune Siding XX%. market. by we ending over XXXX, XXXX from a period, in that XX% not it grown than starts back, outperformed single-family by consistently X grew Solutions by underlying more years. the

We to and markets focusing and by execute and share strategy are driving product grow trend continue on repair will our take as confident we innovation. remodel this

strengthen talk in will me regard uncertainty market markets XXXX, see data a starts for year navigating the the was market that housing There rates around R&R interest of or a the lower at about than are to Let Most is for to U.S. half fall it. moment, how XXXX. implying housing and better LP’s QX back we XX% the bit housing more $X.XX Consensus compared million week bit of in last and released could with XX% and view although expect starts this. is by significant observers the total housing current than than particularly affordability. XXXX

strong of housing prices. OSB uncertainty, want demand I starts commodity reinforce But siding result high a this As are for to wait seeing for near-term to LP’s softer OSB. we and strategy is simply in not that

grow in grow to grow our R&R, is strategy rates expand grow SmartSide, solutions geographically. exposure structural of portfolio Our our our ExpertFinish, and

strategy, shown to why is We that has share gained the siding on delivers housing value. have reason execute our because the consistently and market. will we strategy it continue outperformed This

short-term housing demographics benefit production to will growth. long-term new and investing aging gap construction its and when respond our liquidity strategy regains capital sufficient with As to allocation. we flexibility it structural and before, and by more strong preserving we effectively do In undersupply disciplined LP while for remain long structural than than and against tailwinds protecting bridge as our R&R housing executing siding capital have will said in have the weakness And run, very with ability market downside and enough short-term operations fundamentals the we solutions. more supporting continue the market stock plans growth to in for footing. our to projects

allocation I will to results our it and that, to on Alan our strategy. financial quarter for with over update discuss And turn the an capital

Alan Haughie

housing then the current its compared minutes spend shows performance and starts quarter full environment few a XX-month to will I I year fourth discuss reviewing on the impact outlook. on for Brad. a X Slide trailing will LP’s siding basis. market our near-term Thanks and growth and

disconnect As right Brad mix and products, fourth the the the ExpertFinish show pie was specialized mentioned, The primarily quarter. of with the more even Shapes. siding in pronounced most charts the to

the was percentage year-over-year. by fourth grew of volume shrunk the ExpertFinish comp. a total by Although growth of of in from this XXXX, rebuild X magnified Resulting point, overall artifact the XX% quarter which revenue press percentage soft by exceptional the an volume, XX% is of admittedly

Slide The for story and starts drove investments of increases two by fairly by selling List and EBITDA. inflation price The XX% simple other growth. while $XX quarter in X for a a one. The volume prices headwind. million grew future negative fell again, of inflation These in and detail. added gain more $XX X higher, shows freight EBITDA to from increased favorable the is the margin In mix the conversions words, produced double by increased factors XX%. the XX%. and quarter materials million from points growth single-family costs net impact siding to marketing raw housing resulting EBITDA was in and XX%,

By added investments, million XX% conversion $XXX a for EBITDA $XX margin discretionary the tells lower and volume Slide prior partially two of by million year. press here EBITDA, XX%. meaning prices marketing. inflation the full in $XX significant a full and XX% starts. than no of costs million higher similar inflation, And after growth was X single-family EBITDA for year XX% of million year with netting rebuilds, offset selling story of $XXX and higher

costs. million million million from and in structural a $XX The commodity XX There caused Pages prices OSB on $XX inflation, high-price charts the late quarter and million from realization of XXXX, $XX the impact of are XX in market Despite quarter reduction a devaluation. this, solutions. OSB EBITDA raw volume resulted algorithmic in of from EBITDA. from impact fourth is $XX generating $XX OSB falling million inventory was OSB resulted $XX segment The outperforming and raw the mostly materials dominated lower our guidance, hit the rising by of material curtailment by million in and higher-priced

waterfall from margin XX million Solutions more dominated This products. volume. shows do commodity than of full price I from highlight impact $XX Structural $XX the higher the that offset the by the impacts is Page Structural the incremental While want to lower growth million EBITDA increased Solutions on year again inflation, of value-add

LP’s our and slides these are ebb nutshell. four control, OSB strategy high our Siding discipline with specialized growth engine, on we cash growth generate transformation in for prices underlying and continued and hand runway when our and long And and amounts significant products, we is so manage capacity steady demand. prices are well a flow market. on the prices the our and focus above creation value production other outside of demand

drops offset increased Slide quarter. prior growth, what callout Structural level everything team. to OSB million respectively up. Siding the The a some a and enough by million by for column $XXX $XX in price partly $XXX we prices and of million and quarter the offset $XX inflationary right-hand a positive and reduced the [indiscernible] the or the $XX is XX pressures EBITDA losses OSB else volume, LP LPSA year million. curtailment million the for EBITDA OSB remarkable result by similar than OSB fall and $XXX EBITDA Solutions shows contribution. growth delivered capacity siding due control with offset million a XX% in was not very forward in lower completely $XX ramp America, reduced and $XXX revenue Sagola’s by however for specifically volume than in million. roll story the for can mostly falling EBITDA commodity netted revenues of quarter market revenue This by $XX that siding saw Peace growth, It further million. from to the high combined Valley’s other OSB the North million by revenue accomplishment was almost OSB

for year more of the falling XX revenue the OSB for $XXX growth provides than of same the full Slide offset of prices. impact million analysis

Solutions $XXX inflation, of presides. view OSB else offset compared outage and the the For XXXX. Other to for produced Sagola’s conversion to cost everything conversions, Siding of mill million almost this was EBITDA than of drop impact Structural the growth EBITDA, enough million signing, EBITDA of $XXX LPSA’s combined and to prices, for

cash. fourth The cash ending in balance the $XXX things, And CapEx fell year a and million taxes. expansion. spending ExpertFinish other saw million $XX our less began few of $XXX Operating working in $XXX of presentation with cash Page of result flows million the capital We the plus net cash XX of decreases, and of after quarter EBITDA dividends quarter Sagola Bay the million is at of million, flow Green of shows $XXX $XX $XX $XX on million million $XX conversion quarter full million and the year. siding by the heavy for mostly million.

P&L you Finally, the from if will of an million XX the non-cash quarter. $XX see includes $XX resulting contribution plan. is million our you share. look the the at charge in presentation, and on account from per charge settlement defined earnings omitted the of This EBITDA adjusted charge Page the pension This non-operating

move strategy market to let transitioning on to the respond us And me that, current before how helps and with LP’s dynamics guidance.

Brad described, in as investing is SmartSide, there you uncertainty Solutions the is Structural know, As in all significant meet ExpertFinish, LP growth customer and demand. for to market housing

to anticipate before, As is the delay should capacity we likely softness flexibility we current we to market that expansion timing have said significant projects of continue.

manage imply. more LP we customer flow liquidity enough temporary have cash mills to will reduction withstand that would to to in However, to the customer reduced and discipline continue meet demand. also demand its than

we strategy inventories market to OSB with is us demand. the mill I this decreased demand inventory of market or just temporary that manage digestion OSB, inventory we is a as and the that are of evolves. as as agility to balance file this a confident are will that naturally. working assessing which now I took period constantly the hope supply to demand, from downtime indications the all prices customer that and company up slowing In expect through order down am and at end allow the transitioned are we siding, In and managed quarter, respond

remains though flow is Our unchanged cash dependent. capital the allocation strategy somewhat timing

dividends is cash that our fell, share cash repurchases. the via a OSB quarter, first at stockholders leaving about strategy to share shares, million. prices growth return did repurchase fourth we and not reminder, remainder and only as to and the count any then As then invest flow $XX own In to in the to

repurchases in have and authorization We belief remaining Board of cash a are that shares million our undervalued, $XXX for flow the will allows with be consistent market. our back

In terms retained of million $XXX we undrawn liquidity, a revolver.

strong balance years. X of to protect this million execute during but use X.XXX% $XXX strategy. debt to sheet, at have our We We long-term very intend it

inventory cash current we a shaping first flat appropriate to from offsetting final negative or XXXX, with expect will at first Brad is consensus transition our we be that increases expected quarter, XXXX digestion than volumes. of be in our managed revenue balance manage siding OSB While up to with and the as least prices, price the a discipline. sheet Solutions of lower quarter Siding CapEx for the X% following result with in roughly housing the flow, In is to lower year mentioned,

OSB, assuming in In down would taken at $XX match please at LP With OSB production mind is level offering demand. fourth the to first remain quarter to from bear quarter the result constant by published that revenue of EBITDA guidance in sequentially factors levels. reflects all capacity OSB be million. total OSB reductions customer least [indiscernible], And for about these at prices a XX% of these revenue by prices would levels,

the housing and to demand, offer full difficult given market it’s in year revenue full repair current accurate to Siding uncertainty and Now regard with the growth. guidance remodel for year

that have are guidance going point margin. call since But However, the greater segment we which underlying hold to to next off meaningful the the we will underlying are is expect market clarity. earnings itself to a outperform difficult on by predict, by confident we substantial market offering until our Siding

guidance, for to outperform Similarly, CapEx underlying will grow year the full investments market. necessary the and we make

more to data than in up demand. as As plans down gain flexibility we CapEx enough customer significant said, we liquidity and I about have or our more adjust

now like for hand I’d some comments. back And it Brad to closing to

Brad Southern

Alan. Thanks,

uncertain near-term are don’t market want easy up softer the we present current we still and of minimize through As order Siding R&R managing demand. OSB been challenges we market these to and starts activity detailed, a never the in housing Alan period working to to effects catching starts. quite housing factors as The file are match I of have is predict. enter capacity

we However, there things few about. are very confident are a

is must of there resolved. U.S. undersupply undersupply structural First, in homes This the be eventually

of have segment our capacity, the in for average know we products can And industry. history the team growth a outperform the underlying age long R&R. our will our that for U.S. long house runway third, the Second, the Siding The a of best we in the and very has suggests in we market that with CapEx and plans gaining balance so outperforming and sheet market And and manage our continue. shareholders. discipline to OSB the share we results that and will deliver LP continue

what year. X.X incredible than started conditions have has an past was XXXX XXXX with market the different years. experienced we

LP resting However, build of record been XX to sustainability XX bring in as confident close, we a that to our shareholder we deliver are have our years not never innovation first on the will our growth, more I value and on years. laurels next

happy And with that, be will your we to questions take

Operator

today question Our George Thank America. will from of Instructions] be Bank you. of Staphos first [Operator coming

is line Your open.

George Staphos

Brad, million relative to at lower siding questions – much thank and for in takeaway. the taking in now you us in Thank up Are and Thanks see just have very points, are producing relative morning. difficult, that is you assess pretty clear more way terms for to stacking for it’s way you’re siding thanks parts demand – production tell, to more OSB. I’m And can takeaway. producing in Alan, to what my in still Is you there you for it’s all inventories? but as a OSB as bit guidance to largely assuming know stance that and guidance? of through is Or gone to related difficult you with a now how your right everyone. a and Good I you. Hi, us recognizing the first details. terms than give given volatility quarter, of far a the you line the moving pricing $XX with you for color there rate

Brad Southern

siding. the with question production me let start George, around So

in governed has in volume more a the been QX. bit keep just is beginning had Houlton at one We produce So production all or at up that last – the back to production. as close QX QX of year have little went right in Houlton full and through well to and into actually ramped that capability line – we a so mind Houlton

pull running are question to answer match a And we’re other bit order there try siding plants the – decided production so capacity better. we the some is we a out the take going at little to just full to to Houlton, were have through than to

Alan Haughie

Yes. then million. mind, the about was on is that. number last around could quote predicated in for flat. am on please, you OSB of color second based prices we And to the agree $XX holding Friday Bear I give OSB algorithmically actually question, I with the that George, out

roughly follows, from everything the minus million offsetting $XX bit million. OSB, siding, else, about $XX million, for breaks of negative conservatism, so as everything minus from for So about siding, OSB. minus LPSA plus for $XX million rough $XX of million then million $X $XX corporate else. perhaps, $XX including $X a million And

George Staphos

the Thanks. I’ll it one, last Alan. turn And over.

retailers? at commentary in – what going you. be that? looking will over. engaging will the seeing box I Thank or What And of mentioned it siding. looking of push out remodel of to the be the of key You we or should in quickly to dollars repair you mile will be talked whether how analysts we’re terms have flexibility about decide you that capacity activity, delay or weakness turn as it’s is to markers that needed big you ahead your go your ramp be as relative you peer pull for in What back? ahead companies One to some revenue to?

Brad Southern

a steam ahead and ultimately the – like ExpertFinish, be all for the capacity. the line at no amount be what year options And for housing the end volume full just press what And get then on standpoint, up to and ahead for we apply the and off we production, as looking over Similarly, full of of inform from in kind we on path full Bath, this by that we couple New will go at the on on to then production as year bringing looking press of that see we’re to our decision start-up, next Sagola forward let Sagola feel press the tier on staying will for or look ExpertFinish. just would me of year. for pace to We George, various through next which significant hold added capacity that expect be two and also at capacity the we’re what on reason of back say years. York, a expansion. continue So we that market those well growth – will whether year, the

We’re for haven’t engineering not call beyond we’ve still and for X. actively we’re different delayed capital we as involved that. procurement anything. design talked ExpertFinish capacity – components previously, about – have haven’t And in we Houlton we begun for But the Line on

around better the We in we’re summer, the will haven’t we have as the had to in of many our spring what or we like capacity foundations. a get we and looking on decisions the order the is reality then on feel the And for put still near-term, govern spend and what for market to seeing will actually file. beginning ground

George Staphos

Thank you.

Brad Southern

Welcome.

Operator

from be question next will you. Instructions] Ketan And Mamtora BMO. [Operator Thank of coming our

Your line open. is

Ketan Mamtora

Thank Aaron. Alan, you. Good morning, Brad,

what that volume think to a what about is volume sort terms the in recognizing to growth Is to still of understand different at the trying way in I’m remarks, just business, best is level? housing outperformance question, meaningfully about kind Alan, a way talked – sort of the degree the sensitivity prepared First or is of starts about lot coming a of or is to of you way about uncertainty? Siding to the outperforming there there in think that of either broad think better Siding, market. if back your

Alan Haughie

experience high on Yes, over answer, it’s a that very hard of we it’s managed question XX X to periods on a by underlying a to years, given let’s percentage market file. the of of a that last question, we couple very points order level growth. outperform put But our time, of and sufficiently basis, particularly say, for great to believe we revenue the

I that’s And one marker articulating got say simple only underlying single-family really market, so we’ve a way market, and of of the And the clear housing. that.

that revenue And we so single-family revenue expect our to down to year-over-year. be flat that might should model, XX%. say, And housing able be that. let’s argue will, And above I grow you would

to – housing to housing model, what course, extent argue, what And see better. a and repairment impacted would family Of will depends be strength on in by we and single- like that might XX% that’s I’d it housing and think starts. maybe the that I actually some decline,

So model it’s but move points market. XX use flexible, as it housing don’t in to X tandem, working necessarily a the the we simple than better

gains, that we being long through our partly share believe have whatever innovations. – do all by ends However, we market to able driven history and a market of that up

Ketan Mamtora

Got it. Did of that’s I missed you Alan, guidance? perspective. And CapEx talk it. sort XXXX about perhaps helpful No,

Alan Haughie

without open No, I to it’s specifically. give able it didn’t this. guidance sort – like very of form being a in in And discuss to hard quite

of I’ve closer that level to tell see is a range. said obviously as what CapEx. that This is describing do indicates This and say today, projection. model guidance it because be for quarters, what XXXX the $XXX I’m the we will to – of you we of I would our happy last to and wise. lower think not going I flexibility couple would working last the basically is that me million. let think bit. working to But – guided a So model a figure I’m I be our

QX QX will willing It’s Brad pretty is creating to land range million that $XXX like of $XXX to in of said, we commitments of fairly intend as hard I’m with. a $XXX that say, the Our XXXX. we we will where ahead play we’re number of spilled And CapEx to heavy. have. up. $XXX we CapEx to lead but of for number that be working course, quote million in heavy. because to the will model of items something million the have long time use CapEx be that million a will And flexibility

is there no absolutely there. So slowdown – no

Ketan Mamtora

Good back Understood. jump the queue. in No, that’s very luck. helpful. I’ll

Operator

Our you. coming is Instructions] Goldman Maklari question [Operator from Susan next Thank of Sachs.

Your is line open.

Susan Maklari

you. Good first bit talking Thank about morning, question everyone. pricing the for is My environment Siding. a

you’ve First guess, do would give you that environment, increase early of January. I I all, where the volumes with And success how that in the And little given you this be update from a seen moving hold you’ve can and continue on it think any to in differently believe pricing volume about price was that ability year, What’s the us we think macro you are about effective a the that willing realized? housing a perspective. with announced in to versus – versus to you last volume? then late price lower,

Brad Southern

could question, I we effect implement say the was accepted able we’ve all first as it to realization, increase a done the the predominantly consistent the X. way little there for marketplace. past, just price Susan, of would QX January it lingering were but through in be our of in with

to is – I the price siding distribution. cost most are jobs So we with. think don’t there there. minimal the pricing play start doesn’t mean, trade-off, that And volume a work for in way. concerns we’re have I then generally, citing

partners pricing that done distribution in we of warrants our a we’re have and the channel. value-add so like the to market the the getting equivalent feel good through product price And job

that by that are active obviously, our deals, kind way deals. we want get price do do at to should expect is would specific say, P&L. price require to there January process volume we a got and in I of we in of is an of exception large for And rebates. I’ve which for year, and time that away I see to increase – we’re typically those result some customers for that Now and now. worked national that back-end around to can the ships has and But just second opportunities builder And that to that say rebate pattern its list part the the game type quarter continuing large into of increase

Susan Maklari

holding Okay. locations to segment, about curtailments That’s some production And for more on through the about color bit and may you pricing OSB move think a turning us where OSB the production talked Can how helpful. as we very about you’re there. those you some then year? give of thinking

Brad Southern

Susan, With I’m by our Yes, way entire talk that somewhat we what going to would across the not was mill holiday during this to would mill I go did. and I season. general pretty it through – QX about say downtime describe is and easier do system.

from we demand. transportation in in will we downtime you, was little bit the around it downtime so the a match it is – QX, in comes Thank be taking will mill and demand. as more And to to QX to distribution of And we concentrated, so targeted try the back order including the then match be widespread late and cost come into but needed more a holidays, QX and as everybody

Susan Maklari

and good thank Okay, luck. you

Brad Southern

Susan. you, Thank

Operator

question Our next Roxland from Instructions] is Truist. Thank of [Operator Mike you. coming

Your is open. line

Mike Roxland

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

housing cycle, home and business it equity to question is and this, economic Siding the the you’ve [indiscernible] tested an continue Siding, to be a give just realizing the really up that of grew softens, unemployment stress of you’ve excess an down value from increases? will you during the what Siding yet as I’m economy trying Just confidence grow and inventory premise cycle. on transitioned order has the managed as you gives get mentioned, And declines, during a sense a file away to

more grew home people, out few likely lunch obviously, In sheds, cold things building R&R addition, last break. years, the in from given than other normal during work during building the

consumers slow current given in could items. as how Siding you’re sense and there risk on to say, actually choose environment. the small of trying the So more focus get to is a on, let’s R&R that framing more a backdrop ticket I’m just

Brad Southern

Yes.

of macro the kind that And R&R so the at. depending of say then outlook is least all – for our talked you remarks, you the look we as described some kind So the in spend over prepared about you just now Michael, is that real. right new analysts risk to the board construction we around uncertain on

the market about impact the on of periods certainly Siding growth. on being revenue But other as We’ve No is slowing will go so growth year. consistently stress the through growth point certainly for question housing a not you housing it. during we downtime results this disagree I or And where outpace the down. going market the about underlying business with tested of volume and volume

We’ve over that product think and the reason years. so opened for the is in innovation that of non-housing highly positions of that up new products. our that past and has we’ve to show retail why been that’s like percentage then we do done And is, non-repair diversified pretty a new remodel X the about the to able us, and the slide given to opportunities X also segments in good first and revenue our really job and is portfolio even and all, I in around shed – deck exposure

historic we down, to position we’re performs to continue in we’re of still the We we the to go be have to the kind or share. by of market of coming phases given segment, But still lot of that we’ve to going last share low market. significant all last a that of that ExpertFinish and confident innovation given penetration more remark. From down that and parts final depending going and the pretty the Again, but been the general our we country to share so. now. to we our that on in see of an our X just somewhat ExpertFinish in overcome could we’re market but fact the the XX%. and into market. gauged a of going are – the build can’t R&R market market rates This down confident share upmarket the press and gaining in a Siding capacity, because that I’ll relative been upside we’re fill be certain just lower Historically, growth in in see R&R actually introducing ExpertFinish that So up the that kind being – is any segments, in going facility. standpoint. have down, as in statement, picked to standpoint, product one have hold fact we’re R&R make up to essentially a But year, grow. And well this we’re market market we to market we’re a able we share underlying are to R&Rs we’re able feel can historically, is that have given we’ve But ability, bring the single-family on how and confident there geography that. that market confident certain a from R&R years

performs once how So I’m our well not it But say trial, down bode that shop all. customers And excited get over for around little about pretty given opportunity market a brings to at product us we can do – well the that a long-term. the bit. a I for believe

Mike Roxland

you. Thank it. Got

penetration in and just that little mentioned color share? what Just parts lower country lower country penetration provide have one the rates on your of parts the to follow-up certain segments. and you’re you of trying rates about a what quick more segments increase you Can bit that,

Brad Southern

Yes.

in at of Sea north to got Carolina South we in Houlton and in of and But there south, Board, once general, So let up the the center converted York the market and three you share the good we’ve Texas for go have you so me that expanding so country, Texas of and there. of for if Minnesota, just the geographically, to both – east Atlantic and lot remodel ExpertFinish the capacity – New we’ve more building opportunity Maine ExpertFinish. capacity reason North in repair construction a new in

particularly And with an Pacific say still there. ExpertFinish. there pockets opportunity there is are I of good growth, So us there been there Northwest, opportunity is there that some but for the for markets is would then historically,

Mike Roxland

stake the shareholder of the you higher then one under XX%. last And see been more which value in growth, slightly Obviously, of terms increased involvement last the created good turning job a Obviously, value-add large quarter you’ve shareholder? you portfolio products. doing to reorienting higher question just slightly to have it. before through Do being it Got a over. its shareholder

Brad Southern

and noticed Well, maybe is improve tell But have proud that. direct we it. so brings credibility that. strategy to I helps – we’re you direct little not directly, I’ll think mean, the cannot value that But our a there I think to any hurt. would but I result of assume it haven’t that any reputationally, don’t shareholder bit, I as any but a

Mike Roxland

XXXX. Good it. luck Got in

Brad Southern

Thank you.

Alan Haughie

Mike. Thanks

Operator

of Instructions] Mark question from Weintraub Thank you. is [Operator next Our coming Seaport.

open. Your line is

Mark Weintraub

guys. Thanks

seem pointing for be quarter, right, magnitude of margins am EBITDA I siding XX% the to for you my So, first doing business. order to math if

ranges to of I conversion we play, have In on want this of a to the is higher So, much in in of – much just was absorption achieving types variables hoping like we some Sagola the besides of might that at cost included other little obviously you kind beforehand. variables variables contemplate? or what related color be been how want costs and the start-up to of below fixed way How particular, there? get bit might might what other of to contemplate

Alan Haughie

Yes. Good Mark. question,

and zero Let me are QX. for we context or articulate volume in fundamentally impact. more think raw that unchanged left of year’s Year-over-year, close would carrier a costs, and of to drop. year-over-year with you less that basically inflation. million the that figure will said EBITDA of What raw leave About this pricing offset material level high the million to the last $XX EBITDA is and million at material $XX $XX dropping is we

being technically, volumes QX be so the down. Now, with we that offset all in fact for normally differently, is And volumes it pricing. know, except would yes, are as down, with that

I that having less of as high problems the you profitable than a on product volumes margin down, One like the have are products. enjoy calls money. variable And outstanding when your of we on this, make is said, months more

to heavy caused year-over-year, the there volume. by revenue So volumes drop is down of of a XX% yes, when XX% EBITDA impact are

basically look it off, million way are and million the to change at yes, So, then impacts I net raw is $XX $XX we pricing left continuing investments. and material of and $X volume, with of million EBITDA

it year-over-year. how compares really that’s So,

on in Sagola let’s it’s call my a, do it, those are EBITDA. a and the of But We conversion the put And opinion. projects. with strain, planning the strain other right on

about stuff with million So, $XX of pricing material in raw million and of volume and EBITDA. $XX and investments change impacts in offsetting

Mark Weintraub

where Would us destock what siding But Great. would to you macro of all you the or realize helpful. is weakness you tough go-forward trying these out, like you of how of expect sense super sense is really of pieces. same to uncertainties, given sold a are. Thank to much that provide volume you. is just of time guess am conditions give trying get of might analysis might were to situations and the ranges is expectations, recognizing if this any bit kind of type might of kind of ahead sensitivity full on some say I of a different thing volume what volume sort maybe assessment either year for and little to want volume remain I of did so improvement they really really don’t a and sort basis. a I what can think you as is estimate – come under be a to there but you get have lots you the to And moving just let’s similar

Brad Southern

there, We and X. or QX we But relative our all weeks maybe XX% So, order managed six file, so market in means We the eight had some in to longer to increase in cost are and managed the situation. am Alan and are guided January order got let which customers add were XX%. me today, QX a start where We talking about ordering – condition. weeks I growth price of out to can context this. Mark, gauging color

And an so forward November. was drove first talked you when what that I relative guiding to do pull some late into there order to allowed growth QX we believe guys QX we to October, – that that outstanding were

the I we next say, of the Alan, that. because inventory been uncertainty January distribution what has just a we pulled just or that of around really have so a kind help understand was I there bit of gauging I for call, as And And meantime. are I – been the in we And I as at as we happened this two quarters there prepared the feel to doesn’t will because that think until what’s to order now get are when spoken week inventory remarks, mentioned was – now right so in which kind good like of we end right the get kind what an a when result I in the we think, that to. X, the where at it is gauge understand have into have of of are servicing there. demand. on of us really true being beginning think we his out to look got a to have combined feels It’s there difficult file, think from, are for pull-throughs, our what quarter. was to see But build you look hard to we But build QX, know then to ago

Alan, know don’t I if So, you…

Alan Haughie

that. add I to There’s isn’t anything should

Mark Weintraub

costs squeezing a big I bit. impact seems some just did comes And Great. when year-over-year start – another there we inflation might businesses. we yet has real other because optimism, note are that And in you like siding? mean up? down some different showing folks been resin seeing in wood not When maybe seeing might quickly start are it that little lower

Brad Southern

streams is contracted to some So, and it which materials of there just material is other is and on based resin on but price derivative those all basically, than a wood, say a are contract side the lag. oil, major

that even continue that fallen fall we have so And see if of happened. – already some prices as and to oil but – some have we

wood realized more this year. haven’t that not then certainly same area. are seeing we yet. helpful for big us, buying thing, a are margin We any driver We increases on pulp and wood. Certainly, side, be it And in the for could

will price to wood, restrictions I some And to us mills but to us on wood is say we to given into as facilities. some due the us further the Canadian go the increases structurally, having procure have a for big in getting experienced and far So, our of Canada. based harvesting as service driver

be resin But down. side, the on relief costs were side wood just the to moderate not helpful those that’s on surprised think downtime. But from year, for mark certainly an the really with OSB looking hard may you we I are diesel perspective, go be and we there. pricing bring are so costs we at to through us certainly would some as manage having And where

Mark Weintraub

Much guys. appreciate. Thanks

Operator

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

open. is Your line

Kurt Yinger

Great. and good everyone. Thank morning you

pricing off starting of do being commodity relative any a on volumes OSB Solutions segment, the think environment? kind of weakness aware larger in timing in on be products, we you less terms in declining trend in prices Structural in differences terms should commodity perhaps or versus reflects thoughts the that Just weaker And of demand, of QX? maybe those

Brad Southern

I go the just But down I SKUs and do about totally certain in a around on ability to become product were into long-term –I saw those a falloff against certainly products. grow disadvantaged become primarily hard market, that Solutions. got optimistic am certainly where We saw could pricing so rationalizing inventory those can a We market how really competitive market, easier Yes. SKUs. it’s overall – production. the Structural commodity think standpoint, from our We really in QX strong could an volume think as folks given in kind to push the directions both think lag of I in there. down. those solutions structural more market

get of be we and kind Structural think the Solutions downside to moving. where the pricing and proposition so are, of kilter value standpoint is on of the a I about because gauge of And value when both from that upside we of out market the we careful have

I annual did introduced an are to exciting us grow earlier to on, we some strategy the new And believe sound. have really do is we continue that. but keeping mentioned obviously, give to an siding, an had eye opportunity it’s something like So, from that I with standpoint. grow it, SKUs We just

Kurt Yinger

it. Got

you builders. volume and then makes program That for guess and getting success it question pricing dynamic with kind comments touch around there I more to just on in and any seen that the that I the do introduction. could you thoughts some builder alluded a perhaps you kind regards sense. And one Okay. just SmartSide. aggressive. was of as just have maybe the relates And you had But around to earlier competitors, mean rebate discounts have interesting your of dynamic there of my second, pricing also the with to series

Brad Southern

Yes.

We year series. are progress last about with builder we the made the excited

now. about channel about use. are for We wins it. or that happening some are there that negotiations excited ongoing is But some we that mean and is no I that have we product specifically the question it end had a competitive. recently That’s engineered reason

builders there big that’s have and leverage share competitive And have so landscape the gained given the a there the slows market that they will negotiating during COVID. where that right they consume – certainly market as volume is

tends esthetically – be It – in history, product to it to and it. very now It is is is trialed. have seems that That but there we is So very a there. once unlike competitive is pleasing. accepted stickiness to – our

won’t are to But grow good can a win I is out but entire other be the going driver are that. correctly pointed we we as landscape, So, any price there, continue positioned that view our the unlike we we we that, about to operate feel probably a But them what necessarily not even competitive win all. sometimes you value dominant in, to way – where proposition.

Kurt Yinger

Right.

will the you. Okay. I turn over. details. Thank it appreciate Well,

Brad Southern

you. Thank

Operator

next question RBC. come of from Thank you. [Operator Quinn Instructions] will Paul Our

open. Your is line

Paul Quinn

much. Thanks Yes. very Good guys. morning

Just U.S. competitors hard to one of XX to top contracts with signed supply XX builders siding siding. your

price Just reintroduced Cemplank to also have that Also, builder affect series. wondering how your you low expect they their product.

series? Just material builder on wondering headwind of growth the that’s to have a sort going of

Alan Haughie

Yes.

BuilderSeries application. that that it’s very like siding. we superior product everything I have big Paul, out there field that’s builder mentioned, product around I As lap But introduced, for competitive is that a just of the really feel a

to – lot we We share type opportunities. year of how we is to the of will we a And our out of are kind negotiated around able see we landscape circle gained are fro, really head-to-head have can am a price of It’s going to because I market win the around, the think price I we business don’t because price it want away have competitively, too given the I it it’s mean, that it and But to the superior share with involved. this can don’t high we product or But also sometimes plays we a builder we too sometimes you that gets alternative mean it’s And but deal. I a confident hard have tries bid to win off it’s And sticky. am so business like year, now battle lose to then this and anymore. I a – and sidings. then it. walk back for last once And confident that competitive that their anybody product. I volume it they

Paul Quinn

boost Thanks us Got over give I that is to you ExpertFinish, could the mean just it. on see great for margin if then it’s an And of on what product. growth. that that. idea

how overall Just the margin profile? that wondering affects

Brad Southern

we just kind But our Paul. expansion immaterial. have Significant It’s boost West, the the of we much from as price – in is the right the lines is currently a But pretty reported margin, of facility, added – at margin margins these ExpertFinish us. Green material, newer Bay. line get we that contemplated bath with There now. a wash it’s ahead our those with isn’t in that post today the up out associated ExpertFinish, and it’s

Paul Quinn

Okay. Thanks. of guys. Great. luck Best

Operator

Instructions] of [Operator next is you. Steuart question Our TD Securities. Thank from Sean coming

open. is line Your

Sean Steuart

haven’t the Thank you. stay wording to answers just supporting there off that your subject your active program And program questions. implication I all have thoughts I you finish – of have remain share that it’s and there you Good CapEx think cash to Alan, was could and late? changed, it buyback on flow to thoughtful the I really to morning future? share seen tempered program. outlook. Is with respect the a foreseeable activity of one, the could on and presuming we an with light for weakness intent in share that the your price buyback potentially guess you intrinsic forgo for value And thanks

Alan Haughie

want reiterate something. Thank buy a great don’t opportunistically. I question. to It’s We you.

one to the in opportunity mantra, opportunistically. we we first that repeat put I will first, this, like I investments don’t my buy put take might business and business But imagine, we back yes, the shares. the in investments wish So, buy as we

predict have that So, discipline in maintain we well. we to just And that have point will do already I the generated sure buybacks. cash come, I that engage can’t to am

Sean Steuart

Understood. rest And questions very have the answered. Thanks my much. been of

Alan Haughie

Thank you.

Operator

I This turn go the like back closing session. Howald for you. concludes today’s to would Aaron call Please to Thank over ahead. remarks. Q&A

Aaron Howald

Okay. joining us. operator for Thank and you, thank you everyone

there We the are and further at are questions. no hour

look and with for earnings you quarter So, we you to speaking much will close. Solutions the Building bring very call joining soon. a fourth LP Thank to for us, again we forward

Operator

the rest and joining, for you day. This all please concludes your enjoy today’s Thank of conference call.

Louisiana-Pacific (LPX) 21 Feb 232022 Q4 Earnings call transcript