LPX - Earnings call 4 2023 | Louisiana-Pacific Corporation

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Operator

Good day, and thank you for standing by. Welcome to Q4 2023 Louisiana-Pacific Corporation Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Aaron Howald, Vice President, Investor Relations and Business Development. Please go ahead.

Aaron Howald

good and operator, you, morning, everyone. Thank for the fourth you joining of us for results LP's discuss quarter to XXXX. Thank and year full President Aaron am Business My and of Vice Development. is and Investor name Relations Howald, LP's I me Executive and Chief Officer. Alan Southern, Financial Officer; Chief this morning LP's With Brad LP's are Haughie,

LP's will is which investor.lpcorp.com. call, During a that webpage, this we morning's has IR presentation to refer been posted to

materials detailing are Our LP's and X-K and filing, model there. press sustainable also other available release business strategy

will statements forward-looking discussion financial non-GAAP turn reference. And to by X I detailed further X as X-K this today's I also The the that, earnings call with supplemented over metrics, usual, As presentation morning's materials, are incorporate filing. contain and them and Slides reconciliations the Brad. appendix will on that Rather herein of by those contains than of presentation. the reading

William Southern

Siding thank and quarter, better in fourth we Siding achieved order Aaron, discuss a the destocking back year. in EBITDA its us footing joining for year. In the inventory XXXX. Thanks, ended growth results of the is all LP's fourth for the LP you normal year serve. it began returned XXXX the having and a to on half flows quarter markets to for full share after of of last I'm and the pleased highest a first that cycle than margin much

better very recovery a million This year over was construction, Wawa contributing heavy after their the basis will encourage remains remodeling These I starts. The were the new existing elements optimism efficiently but to are Siding X Ontario is affordability larger in even hand on to operations, generated full our improving prices, for optimistic in presentation and but homes repair strong ago, in confident, bringing an LP's current Wawa, a within quarter. full newest the XXXX improvement $XXX due and fallen capacity peak conversions. Alan by well realization LP growth. respectively. largest of The a Solutions. control. XXXX on full being that to of in construction consensus the our LP's demonstrated of total about quarter liquidity. results investment performance year also homeowners. $XXX year. investment to more management year from in housing SmartSide after the for in our serve meaningful in finished The Siding ended sector starting the for result along products and homebuilders. contributed Structural efficient Sagola, QX, and export in shareholders and into problems year but million of but the in lower exceptional comparisons $X.X on another York. mix. factors, projects enable per share a of dividends of are and New and fell housing Michigan, to the share We have LP million residential of second portfolio will results, projects return OSB and allocation positioned of guided softer construction above export projects. and total million, later products in for of higher normalized EBITDA in our EBITDA positions largely R&R with our last XXX XXXX $X.XX of $X.XX some details in points and LP and us forecasters and durability, rebounded These near-term market, capital the million markets are starts stronger QX, mill QX in OSB expands gain expect rates via outlook into million in rate interest Affordability are $XXX at a market OSB to saw and a or cash to price many take bit which completed with in consensus range. Page interest will sales $XXX earnings Like meaningfully home XXXX significant the LP with clarity notably saying growth and in for to weaker. challenges year to capacity, well strong both the but strategic to safely businesses we and about million, of that conversion fully finish LP's billion translated flat rates for with and homeowners negative, year of long and summarizes up our acquisition half cautiously needed translate single-family $XXX than may QX, in offer beauty capital this the improved portfolio of SmartSide XXXX. Regardless completed persist, in early million the facilities of facility Commodity to solve below mill new and more Bath, in sales of profitable LP strategy in $X.X $XXX LP $XX a the the year. from acquisition The with single-family offer a to year contractors future a over prices but runway Compared I'm we running. summarize invested builders,

and accelerates with This capital investing whatever the operate and our improves of utility LP's happens the in stewards prudent We our dedication capacity of growth productivity, returning cash in innovation shareholders. None product process market people. we without of We are and are brings, and investing new discipline new capacity margins. and to strategically this while innovation enhances our technologies. our

proud too rate our teams team operations of performance. X.X. operations with incident performance The in total efficiency year incredibly XXXX, the world-class significantly is delivered Our this single for better sector I'm but injury of in ending a many,

never and navigating sales of will marketing acknowledge I environment managed want for difficult a working for process a ensure also LP. safe file. We and transitioning order everyone teams to thank stop work to off at the

you As team LP's outlook as in a nationally as Thank we've teams Newsweek your highly result by for in in quarter for work. culture our with local place recognized Nashville contributions and about and more our the XXXX [indiscernible] great a to by QX the LP details Alan built and will talented every well performance to LP share in member that, our financial of great XXXX. was paper, as XXXX. And

Alan J. Haughie

And represents XX results the back the last fourth volume, year-over-year the quarter in guidance rather quarterly a The comp. expenditures. Slide million full quarter and and businesses a such, then drop in OSB revenue is, XXXX in Thanks, months capital file. $XX Brad. the a million in X year I'll quarter the waterfall Siding the fourth the briefly it for drop results. and was review EBITDA. corresponding drop and which order offer difficult biggest time, therefore, was Siding's managed of EBITDA for shows as on Jumping in $XX for and a Siding difference XX% the in

tailwind. This, of and The highest Siding running, the ramp-up On margin was XX% the in in material finished and business and quarter improvements EBITDA. side, the of produced Siding's costs. $XX absorption reinforces inventory with other EBITDA $X in year, margin of our of long-term XX% stuff, which EBITDA confidence million the target. combined raw a fully resulting in with Net million now Bath plus conversion costs, lower million continued are the up Sagola EBITDA and $XX

elements Now prior belabor most in that I won't the quarters. given the year on waterfall important Slide full X, we've discussed

carrying However, the the while XX%, investments. Slide from until OSB. further for like I in margin full quarter difficult for normalized. particularly Capacity, covers $XXX first a represents growth least order stress, volume, a lower new at meaningfully fourth X capacity. months, to which so is demand inventories future robust a Nonetheless, to would of useful year perhaps in the CapEx, for that the respect X a EBITDA runway EBITDA recap with it particularly to transition customer cost of year file necessitates light the of managed million long made provides with of

dominated volume, by revenue. quarters, quarter. OSB's results because of operating value-added during with incremental the of and material, $XX in of raw million ended improvement $XX a and $XX EBITDA year price OSB million that, of adding the higher Structural were transfer Sagola year very as Siding a of to year-over-year Lower normalization, one tailwind, efficiency. the significant $XX the in a quarter partially our conversion, was of X of but million by in accounted added part year, on prior Volumes million Slide business. the on prices partially about the lower are the other EBITDA and costs but SG&A offset be full given incremental and fourth by to lower recovered subsequently respectable Solutions million material EBITDA. than than fell steeply higher lower costs While shoulders XX% in $XX they raw year resulting the for can third this in offset Sagola the products volume mill overhead the of summarized costs lower producing

XXXX the cash Structural a flows LP's volatility Solutions uplift portfolio. Other cycle generated was the for quarter Slide strategy: operations, by the was business, Improved value as and and shows Wawa, than efficiency than OSB OSB average as from the straightforward, the capacity the management in shown for despite incremental quarter-to-quarter, slightly of XX. of the on year whole, Taken acquisition better power historical which the consistent disciplined

and million operating dividends, $XX of of After of to the year, investing taxes resulting cash. left the LP flow. us outflow $XXX EBITDA, million and in $XXX million million the in paying million million acquire shareholders via mill $XXX returning $XX earned with $XXX $XX CapEx, working in Wawa million million built cash paid For cash net to $XXX capital, $XX million of in

one LP's Now me is let anticipate strategy capital before guidance, to allocation I unchanged. and answer question. transition

invest LP we undiminished, cash, via in a and from $XXX Board. will and XXXX, cash dividends did order. return that our any to so in shares growth in authorization repurchases earn repurchase do the retain million We not to share motivation but and shareholders is

lower cash We will and and when our cash repurchases Siding. of be balances growth flows in share CapEx resume should a meaningfully year warrant. XXXX

repurchases else guidance the share much XX. back which Slide table, all equal, us very brings to So on on are

Siding as and well our behind back historically the destocking us growth With more prices. as footing, normal on OSB inventory

the therefore, An expect record improved what to revenue forgive say, current have the We, if expect X% and a in $X.XX we a of remodel. about in starts billion, flat outlook and caveats. In year order both forecast and far full consistent partially capacity, in is expected EBITDA margin approaching of and saw let's and quarter selling in around reduced the XXXX's both offset with growth in and outpace single-digit U.S. consensus of for XX% fourth marketing. full would to level. seen And repair housing this Revenue Siding total discretionary XXXX. for in from we full would year EBITDA have price. of of the so in in year pattern growth for combination for $XXX between by resumed increases million, obvious to year some declines Siding with $XXX Siding, revenue and investments a seasonal growth volume result offer very visibility for of, businesses, you'll normal million We a more XX% result

be the compared does second of million, the $XX first assuming quarters pattern an fourth. $XXX $XXX the million, Well, the more what for Accordingly, million the million demand with So normal sales EBITDA expected XX%. means to are in in seasonal quarter margin to between mean first and expected return quarter? and to Siding the higher somewhat EBITDA and to first about $XX third this demand of for range

introduce earns year prices revenue variations we're the EBITDA selling guidance even and which production. spread. cycle. Instead, This OSB, average for is volume cost that on in OSB spread square of the concept the X,XXX pretend average won't per without This EBITDA impossible price accounts business of both the to feet over of to a cycle the For full we offer. reduction, is going

useful, adjust our utilization, mix, be capacity And factors. As in in to third of similar prices we maintenance our of manufacture. recall demand and other response, therefore, XXXX, at small can our business selling reported prices the first we that of how commodity the illustrate fluctuate, cost achieved this costs quarter the product and nominal And EBITDA. very a in were very These EBITDA. XXXX, OSB quarter but different positive outcomes, breakeven distinction and

be excluding trailing Now XX-year when This actually LP XXXX the been OSB historically, OSB outlier in we've have high the much And an I X and prices price X X,XXX very average of per demonstrated around spread average the higher. fluctuations a with are cycle rise. that ceiling when just square as a LP's low, spreads years $XX floor business, XXXX, actually for examples sales above is actually, feet the commodity was can prices volume. in EBITDA range such of resulted Actual cited. with then when held

we this with in to the use on the just the actually is this if EBITDA we'll of quarter close estimate build concept for and concept LP's And running about EBITDA to this generated utilization conditions. per capacity, average feet to construct that at $XXX So first and take cycle in I a average square very it million billion from basis. OSB, would apply should about start outlook there. X,XXX square feet current generate X at $XX XX% we XXXX. To

we volumes similar to square feet. first to be million at expect fourth around the million to quarter, shipment XXX levels XXX For quarter

averaged So length far, the prices just quarter higher about have reported. random fourth we've than $XX

under OSB price million quarter if So should OSB predict assumption, prices. to $XX first volume holds, to future $XX no that million. in making attempt around We're the EBITDA be the

EBITDA quick million. year covers the quarter the million of full So America's the to sensitivities. X outlook South million quarter costs, $XXX OSB LP million about quarters we together EBITDA our simplicity range. A first first sum $XXX the that cycle on for assuming I corporate $XXX just expect and by followed the year of for outlook and Adding to gave, word businesses average of with is $XXX EBITDA. full X

EBITDA million increase we price at are business Siding, feet from this that the $X XX in As EBITDA square increase sensitivity in volume. Each would realizing the most decrease or incremental January already volume million or in significant baseline subtract is typical in add about margins. of

of based table our XXXX. to utilization respect LP outlook OSB, and are and invested capacity the capital spending, SmartSide price incremental assumptions and in sensitivities course, XXXX the volume on and for EBITDA For shown same and in would, construct to used in heavily compound. With ExpertFinish

As a us. capacity result, of we have runway of a ahead healthy

XXXX more We $XXX year, total. will continue years. roughly this in roughly on growth with smaller capital a XXXX, Accordingly, should scale to lower recent million sustaining albeit targeted compared to invest see XX% maintenance and comprising than the investments of

currently Bath is XXXX on that happy historically with LP's OSB take questions. hangover. XXXX because last ways, Houlton something growing return the range. high And year, be after a capital of a investment be than in normal. of that, is and a in your So will albeit normal nearly side are complete. And $XXX million Sagola, to in we'll again lower projects the Siding destocking many prices range, to are

Operator

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

Ketan Mamtora

was the And volume of think probably I Siding when you as you working through Alan, XXXX what inefficiencies for perhaps level, then about the with, the high big can the phase? you price to start were as have in inventory are about EBITDA talk given drag, XXXX, increase sort that think guidance, year. we elements from a sort this a at key XXXX, destocking XXXX a was also to there of

just So of X about you talk elements can X as we key the about sort bridge? or think

Alan J. Haughie

given. ever thanks company knowledge comprehensive for Ketan, want Siding EBITDA this was my sense is comfort. XX% the objectives, actually that the a to stress the of for to And has question. do most around Sure, guidance of to particularly I the convey that margin the one

or be in think fluctuations obviously you about impacted margin heavily would heavily the is can volume. the -- volume impacted If sensitivities, by

see will from we're benefit volume the that hence, -- that of increase we're our a XXXX. going presence margin volume in so that uplift. that EBITDA And And to confident

that though, have the On we the situation business, in we and degree anticipating is will as years the doubt, margin right grow now are business, as question export no of a increases not not profitable, improve It's I itself rest of expecting accretive. the production, which but same the necessarily which volume, our to as absolutely progress. finished we

in than secondly, as extra essence, rather mill get we at and as that's costs inflation in offsetting the ramp-up And is this of And certain yet. certainly We means Again, order that that of one no are and product the benefits still, to heavily that producing that's inflation is, in a from in more we Siding actually making ourselves carrying we sure are a XXXX decision we're or rather, in move of that thirdly, continued did marketing, also future say, heavily XXXX let's we're anticipating will network. growth. of saw removal XXXX. And XXXX. we investing you course, that agile from some all make our labor we freight note, by selling in you XXXX there largely in into mills, our have depth

-- in in So guidance this factors all we're you. that the they're the giving basically throw those pot --

uplift it was I number literally at XX% to the this investments I I and is safe in the given And blowing these the is least out said number XX%, think volume least, I've we're and signal occasionally, don't tempted water say all when of confidence the the any that number. send on margin. of But cart. EBITDA blown we've of a to our at so out want water, making, very think But

Ketan Mamtora

middle sheds one What through in sheds terms And Siding. destocking perhaps context. of this know of year, big more went pretty the you talk I maybe helpful seeing in performing? is the very there. the that's are you how demand? No, business we Understood. on Can Brad, in phase

William Southern

Yes.

So a second recovery of half shed had good demand in Ketan, we year. last

our sector the order in to file, was weakest QX good. we have. certainly, now that it's Right So okay probably

right order now. It's our of right channel build shed was there year. part it's the little weakest inventory serving carrying it's okay, kind happening of file. in that that but think we just of the but what's a anticipate out But do not now, I throughout bit

referencing, certainly of a sure of shed experience demand normal this year. demand we'd being but like the very just more of year We're the seeing Again, As inventory little No are through I'm for of kind this that market. the the half you in first of sector. well, year situation little we a overhang post-COVID an across that being now. worries we're a there, current carry working kind channel carried right -- did pool

Operator

the line Research comes next from from Our Steven question of Group. Thompson Ramsey

Unknown Analyst

Maybe spend or where and And product to spend that type? by success continue marketing topic talk is sales? ROI, the you sales judging to how the focused can curious between the there, Siding spend the timing set customer you're to

William Southern

to first focused the all, So segment is incumbent on ensuring into are with of sales transition of support from that technical along and standpoint, goes new assets resource product sales construction the on X that focus, a SmartSide. of a areas the around Siding the smooth that

a to and more sales we're remodel. there sales on to and then that, then our requires in that that or different So is marketing support. personalized That use side, And the and a convincing process resources reside the contractors adding where of a is their house construction. new product, are actually bit consumer-oriented in push homeowner primarily marketing repair good support in of focus

marketing of there, the And our on is growth but so of is focused not repair all spend remodel. certainly, the and increase the of increases majority

Unknown Analyst

to just Siding going midpoint both looks improvement. on for full and consistent like it Okay. about Slide year. outlook XX% But midpoint, bps then a have margin That's XX QX on the And XXX you perfect. of the

uptake you of how and off curious production? plays the of base Just the year? seasonality into higher that How the volume about through cadence think

Alan J. Haughie

if are see plays than out, fourth and Well, Yes. this quarters, second year-over-year likely. the high quarters most first going and higher to third volumes obviously

I'm is sure. it volume. -- well, think extra margin But -- my be that healthy not anticipation EBITDA third given great, the if will So peaks, certainly, quarters I and will That's the and margins. third the -- second

Operator

from the Bank question of Securities, America Our Inc. next George of from Staphos comes line

George Staphos

and one. Question to volume of the expect a lag I looking Can the incremental a less or that and differently, sort more and -- the very the as to overall selling. I Brad, there talk done volume had of support ultimately reckon between difficult on you investment marketing you're much said OSB? Structural in with growth the project in and to I'll expect marketing well 'XX? that the all it's a the incremental I I That's investment to as year get anything X, to queue. mix What of Is expecting? on question this terms jump administration, you Siding when Alan, be you number volume would move think in us that we're tandem to in you're when Aaron, should we of margin with number back making you percentage and Solutions selling, need said the margin? general and -- question

William Southern

these investment Obviously, We consciously George, and is there and of made in our additional demand order impact cut sales creation file. -- as or X we last not back the on managed the over let have had marketing marketing support immediate years. for in need X would spend been would that an spend me instantaneous. have satisfying. we've on any demand created, sales did we trouble by It's investment an spend wasn't and were CapEx

less before, the more support we in rate takes add had staff side, marketing our prior-COVID them, segments of effective our yes, -- that the year the us this more to a and is have being on mentioned line repair from impact, either of standpoint, been few return not immediate sales around to remodel. But these create you to sales seeing hire an few already we to X some that volume start more a a strategic the later that that brand -- plus really, with I underpenetrated high then And creating you to mean, we're with I in them really and sales we create an have the anticipate at level a level, a create it impression, just demand on. months but assets months support -- technical so of months you for you marketing we've them investments, feel out have some the or to train and few historically that would then I can anticipation that's spend And equity, field. in or the emphasis helping a converted where the added

I So would best that most sales sales the other marketing of this feel year, case say and into incremental technical is the support into creation this late probably than more maybe will going demand at spend next year.

George Staphos

fourth be quarter, that you've investment too Not disagree later so of But be year. with precise, bottom would my a we the is in terms benefit that of you get the to be already but you just EBITDA volume made in -- Attention should as any and the line, year bias will margin. right? upside the into conceptually, getting pickup to and there takeaway, that? the Or of trying some then overall and be even because of as of incremental seasonal would progresses, in both that

William Southern

agree that, yes. I'll conceptually, of most OSB I -- No, with -- the question the question. And then

volume growth as for back to is I'd margin and that manage a Structural get we year. I But But I goal Siding see love do XX%, for volume. mean mid-XX can. to than We certainly, certainly you for well. If question, more want so between XX% realistic the on is Solutions, XX%. to our -- think, strategy to the this come

somewhat level goal maybe about ability XX% current enthusiasm XX%. a And our margin end price so and XX%, be the our and that on to volume upside push realistic dependent management, probably is will XX%, goal then we'll but

Operator

Our from comes next Maklari from Goldman question of the Sachs. line Susan

Susan Maklari

is on My question first Siding.

of the this that thinking the inventories are could the for next that order as coming success? increase. are the given pre-buy files into channel volumes in think a the were quarters? of year couple what quarter that and about mentioned limiting you as And was and guess, January that segment we you had price last that, suggest of we I the about one, You the call ahead amount on how two,

William Southern

for prior Susan, [indiscernible] did purchases we to X the basically our the limit volume months average customers. over

essentially So to or January. we for December prebuy volume had minimal prebuy [indiscernible] into

I year, really in But good good right So especially some that across we're and people I X weeks business. holidays time Siding of of I activity about the And -- build in that always spring anticipation I this now file. is feel as a the also year and feel now there carry the the seasonal would order how first build normal. feel channel pre-COVID we call prefinished the from the in come in seasonal back build, normal, inventory

so inventory's -- about good in feel and we we inventories good at are our file, pave for the order levels And feel and for level own channel about level. inventory now the mill

Susan Maklari

mean thinking in the And any home on that the higher come cut then pickup And question, timing could How about could rates to are helpful. year, the what sales. as that increase that existing in through relative around That's Okay. we thoughts drive some about housing to when think we turnover level the for and it that perhaps results? you business? the actual in potential could a will down as move the through

William Southern

have interest reduction year would a I have think impact rate I would housing. -- think a significant Susan, this on it

it's the over kind free hesitant this that into interest all provide short I do housing environment market. would make I kind would won't the more home economic, homeowners downward, period the been the that that think wouldn't term into homes to that but home up that existing confidence -- market. just move, of than that to the homebuyers to certainly a would and rate translate be of necessarily of and have at could some the think some on market on for construction. emotional go new be in I mean the I time perhaps movement think, move

a highly for But more maybe year, likely XXXX, of demand. remodel, resigning and be is So than it construction, to it instead economics powerful the out little emotional a dollar is think be new driver good is this be project over And then of impact really changing. the very secondly, would for repair paying or financed high feel I the could on think savings. the that a I -- on of project

rate more remodel just immediate And affordable will homeowner. interest making on I by think do so repair impact have for that reduction a a projects those more

new So think on would impactful but reduction, it it that more would -- to get maybe be we tailwind if 'XX. provide constructions I

a I be impact for us. could immediate for [indiscernible] think

Operator

the from Matthew Markets. Capital Our McKellar RBC from next question comes line of

Matthew McKellar

aside potentially you to Maybe mix year-over-year average setting the BuilderSeries what expect price increases, to selling product to more seem talk you would you first, in able from just Siding in price ExpertFinish to shift XXXX? and more are how affect be

William Southern

Yes.

So it's our focus certainly, remodel extent. for typically, our our new ExpertFinish that point this for price year the item growing I BuilderSeries certain BuilderSeries, repair -- depends is a but and around to on is and brands, it one The construction. ExpertFinish -- SKU, think BuilderSeries

that a So that average be necessarily but volume sells for price. that on higher increases, ExpertFinish would much on And damper margin, on not as for then price a pricing.

that so be up weighting revenue experts we more And would if it. in get our

see have go year. more would net-net I but how not have negatively, -- think there's that to possibly I'm for out opportunity the a as we bigger impact a through to from the we'll probably have plays So BuilderSeries ExpertFinish than

would be mix maybe the upside slight year to 'XX. to compared positive a So

Matthew McKellar

the new on whether with this do differently at much in your next, then have you trend can the that regional should And like you helpful. housing That's across than a what customers starts about from that, housing in segment. point by starts construction, And is Okay. view builders industry? home talk tone

William Southern

Yes.

in felt fall just I exposure more say, standpoint. given a we felt conversations, -- from was there So and pessimistic about some I that one-on-one I have year maybe of this last at the I think conferences the that middle like year, builder would

it now builders certainly there I or Obviously, was impact QX rate place in working the regional has day, a was sell at through January, I the move about the new are this They've homes need we are I moment the of around market. much builders they the the QX in, national it. they're continue can was because certainly year. only for and capability mood in the as where not positive year do but anticipating are post-COVID, as there the pretty the -- on has conference do that efficient some strengthening there the have has there's growth. I been construction such partner maybe just the so strengthened I place is permitting, maybe to And on through builders to solid. -- national end to that think sentiment grow. And big infrastructure -- for optimistic large with and tone right conversations some regional is from also a are because surprised anticipating on as reduction in the hear get existing in infrastructure put to or a the but builders the as builder, -- the in mean, on that get home in the been they this there

a had in So We've sign. really overall, existing I recovery regional think the some at or spot growth level. there. see to that always presence sweet some we Honestly, plays good our could

with level, that growth You us out continued national good at the new could in we construction. a for for year play really builder couple

Operator

the from comes of Weintraub question Partners. Research from Seaport Mark next Our line

Mark Weintraub

more than Alan, the changes. of I back I the drivers know lower Siding envelope that don't. behind bit a margin my appreciate But little there's maybe is the stuff you which, get was I lots bit the a XX% that translates how quantitative out. guys of come into would guess, we could obviously, hoping color qualitative on I little

add you ended, what maybe kind conversation open And Otherwise, pointed at too. so the questions if more have I maybe point? -- to of this you can

Alan J. Haughie

not I'm one I prefer. which sure

you that are you of ranges. numbers And give going Let to this. big I'm couple in me a give

to marketing year-over-year. million the is million reversal reversal, mill level, $XX investment is the the mill $XX high selling for $XX and $XX And reversing. investment to So million million

We course, of and for infrastructure are sort the rest million except change, products labor of inflation, of new anticipating million business adding region elements say, of Siding other part around maybe so. and in SG&A the a development or of of, which of the of we're $XX and can $XX the

that probably big the instances, are investment. And manageable, sort much that's So some more Siding give They in willing I'm are about detail to discrete. and items there are, as such ticket of some marketing as

Mark Weintraub

sort it in Or chart shouldn't the on X, and use you out you've what helpful. sensitivity volumes which like that on Maybe of one the incremental the that beyond embedded margins, the new you guide? XX% is on provide above increase anything That's super pence for is you it... in the is

Alan J. Haughie

price Given something is because if a should us all okay. breakdown yet how you give the not the in those something forward, forthcoming way simply call early get X relationship Based and I'd risk to giving items be revenue for volume use it the call that, accordingly, big you But reasonable and particularly between year the of going that within price your on make and we're guide, a you ticket on going margins, the too if assumptions should you use volume it's in sensitivities on and work there that. a further incremental there. on and to

Mark Weintraub

had last And maybe question, your so and embedded which I guess that it in I the of answers. was sort you

that -- was pricing, incremental should in Or you pricing, incremental would EBITDA? embedded and of additional then that And one we're just first the be the sort be The discrete? X% analysis? say margin that getting to did if

Alan J. Haughie

margin always discussion it's -- margin. The embedded preexisting is a incremental volume, was in That so the purely not mix. incremental

pricing revenue and is So yes, the incremental, EBITDA.

Operator

from Our comes Securities. line the of Sean from next TD Steuart question

Sean Steuart

talking you what assumption if which shape possibility asset Question conversions for beyond run, closures the speak guess operating siding underlies on the that about And on and to thoughts rate the an cost the sense. I OSB of over the and which can But you're cycle on above curve make wondering I'm long great. potential OSB XX% seems average the isn't company. that that, to you're our front in portfolio is giving,

William Southern

downtime. curve. capacity Well, our the something and at or back cost we that had Maniwaki I'll how we when cost a if cost. the that's Sean, It's shift $X cost shape do of But from are probably a into the and level, lower But some pretty it's billion we have we unmeasurable And take obviously, rationalize standpoint. flat. do like that mills [indiscernible] on

the flat up capacity that production we've curve. down or pretty learned then and move the And So to efficiently. how obviously, pretty cost

great of cost isn't downtime either. of the So

the flat least analysis within the curves at the earlier for yes, certainly in and cost us industry, curve case the that's relatively cost paper not could in for my do and the career So OSB. where be business when flat we pretty steep,

Sean Steuart

would -- go But sorry, ahead. you

Alan J. Haughie

trailing For utilization. utilization, XX% average the is XX-year the actual

historical. consistent it's very So with

Sean Steuart

an where that million can XXXX, front? being projects of give it question $XX of that's assets, broad CapEx million $XX specific on focused? Is Second you across us in growth several detail few the a on of idea to projects, a array any

Alan J. Haughie

everything hits and everywhere. [indiscernible]

small biggest a We again, single value-added of item the the in Structural it. are and the the But enhancements inside Solutions it's of can that out. There's I projects OSB. project -- major no -- XX% investment sorry, basically that are is bunch for -- But strategic -- really of projects. XX% call

Operator

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

Kurt Yinger

a been important and is really the that was builders along construction set production forward? is And residential segment? in kind what most what the those terms new curious, of going of customer tipping think to to date? your guess, And feedback itself with do important point specific hitting how BuilderSeries just product I grow from in I to objectives penetrating that you primary lines, has

William Southern

Yes.

the BuilderSeries is for It use of the provides in good. as for workable a the certainly going the has a our builder and are is installed and against. upon new up very important company. construction, objectives that reception It product it segment course. our competitive very we're for So growth to competitive big been and very -- as alternative -- product is The --

an we're compete that product and long that a there's made key weekly -- the so going and [indiscernible] getting aren't citing has -- use. to that good. a has So is the trial having not and process, taking decision reception The against, been the these to the incumbent builder sales something product -- is is --

builders you, process. It bring a that it's a stand-alone, commodity we valuable OSB, process OSB. a America. North sales the all to Siding package, as great couple around Solutions And the even is a Structural the sales big that Structural that. but we homebuilder commodity we're so these our with value we and we part And I'll with tell which couple with long the of even the proposition Solutions with portfolio make I halt as as in traction we of with and incorporates also mentioned, finding BuilderSeries products have

supplier supplier been our OSB a the time. meaningful meaningful in a builder long -- a have to big for We business. are

very our bringing we're through OSB so solution process in And relationship built Siding that that helpful for be is to The finding to a Siding. business relationship, sales helpful. we've the

product. once trial, I BuilderSeries. a started. made getting progress we're the we've get going lot for launched feel love we've And our once very some as underpenetrated the national going usage is I at confidence of because tremendous XX since experienced the to and have conversion, across So we a in were the amount installers to we product product, about be we conversion, the portfolio the builder I that of have we good get confidence the sticky years. level.

to provides continue gain a to is continue years a growth large volume us market opportunity for to on builders that XX story we've So all those us that in incremental as and the this real past grow -- and working share, Siding. been this

Kurt Yinger

demand second just you up SG&A just like coming Understood. kind There's back normal to one-off it, XX% and I EBITDA up. could prior a appreciate time then warrants still to Siding I of call my mean, it Siding it. color of to that the line step curious margins as there, conversion the kind in back and possible one, Brad. in year another picture that's for is targeted on increase bigger getting this for investment sounds large the the segment. to those a talk between extent and if target I'm getting mid-XXs and margins, pretty And about the the kind whether opposed of marketing for sales to gap

Alan J. Haughie

the product. that margins with it's so Yes, we eminently network, the healthier drag new another mill on now become possible mill Yes. as will in is before as Good the and EBITDA which with -- running right the come fill that we're one -- question. mill high-priced extra fundamental the that successfully margin because fact

I have. we certain the we as enjoy is can So we a towards that XX% movement am yes, possible capacity -- it fill them, good

significant amount additions are of behind we've As our and capacity in now said, operation. us

it costs, we the very those to run that we're mills future. confident needed volume carrying carrying we're and in because much our So fixed by is very are that profitably

Kurt Yinger

kind maybe one down follow-up. looks like QX quick of be QX, little volume I a flat, in just could And sequentially bit versus siting EBITDA look margins mean it better.

Or You'll just increase selling out call kind it QX the weighing QX? have increase. to else down and all of versus there? price I marketing in anything the that's is that mean,

Alan J. Haughie

and January [indiscernible] like than what inflation with things that. and call on so pricing, -- increases might other wage Labor Nothing normal economics. you

Operator

to this would the Howald now I to conference like At for remarks. turn back over closing time, Aaron

Aaron Howald

Day it Builder in webcast, to XXth operator. IR recording you, simultaneous Las LP pretty no page the today do, time. the There's post But will starting soon the there. hosting in end briefly the more International with weeks I we Thank X Vegas of let that before we'll in-person will an Investor everyone Okay. remind questions, me will The event on from be and Show, only February, web be no at thereafter. record but morning, XX:XX local at the

call. and for page to the contact So if me. And web you, Vegas. we with close you're reach hope in interested Thank see out, you we'll that, details IR in the attending, or check everyone,

Operator

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

now may You disconnect.

Louisiana-Pacific (LPX) 14 Feb 242023 Q4 Earnings call transcript