LPX - Earnings call transcript Q1 2024 | Louisiana-Pacific Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Q1 2024 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, LP's Vice President of Investor Relations and Business Development.

Aaron Howald

good and operator, you, morning, everyone. Thank for the first you updated joining well us for results outlook. LP's discuss quarter our to as Thank of as XXXX of I is LP's Howald, name and and My Vice Development. Aaron President Investor Relations Business am Brad morning Officer. and Financial LP's Chief . With Alan are Executive LP's Haughie, me Southern, this Chief Officer; After prepared one take will round of remarks, we questions.

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

are also earnings press release materials and Our there. X-K available other filing,

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

William Southern

prices in improved the combined Leverage million and million and first higher Thanks, a LP quarter off sales, LP's first the for in the discuss Aaron, and for and to confident growth in in the from to EBITDA, new results in XXXX that LP both customers, earned good in capital to in businesses more our gaining innovation morning, joining QX all than increase share businesses with of gains $XXX us remodeling $XXX and build got and efficiency which strategic margins. siding results and OSB repair year. beyond. growth, operating OSB LP efficient new million second and of contributed . In products, start record on by and thank and the quarter a are you our XXXX. launching in in poised growing to $XXX strong ongoing a drove quarter. over Siding adjusted allocation. quarter, construction generated I'm these last effect partnerships first of outstanding XX%

our capacity share strong and investments with strategy. us in balance sheet Holton, consistent completion allowed Bath, to resume Sagola has allocation repurchases the of With capital our

control, is, of the detail I'll proud results most moment. our our prices the a million I year, course, am operational discuss structural This OSB first, quarter environment EBITDA. a than in and in But solution the the outside higher by will OSB delivering our $XX operating safely say and strong However, meaningfully In last made that efficiently the commodity to Alan strong demand business, businesses. greater in of the contributing while of were strategic highlights across mix products. for provide value-added team

achieved For quarter, efficiency XXX sales record example, OSB million about than More incremental Structural boost operating XX% was volume feet of this the business year. Solutions. a to for in which compared first square last by the helped

total X.X. cost with results teams our importantly, a outstanding delivered OSB safely control. I More opportunity leading business Pace these want incident Columbia the safety, British under to Maniwoukee way with for also the Quebec thank take at and Valley mills the the efficiency rate and recordable to

X% of from the quarter. XX% primarily uplift, Siding a plus which higher X% expert volume. were helped was increase prices EBITDA higher revenue Higher annual from realization first our rapid the capacity finish. Prices X% sales achieve mix margin effect to compound net higher grew quarter, in of by selling siding volume utilization price the and due increased in

siding As net and volume, the and growth ranges of on our a the chart siding U.S. common housing X margin. shows normalized for high growth guidance the end [indiscernible] in sales Siding of The Page exceeded baseline. total result, as left business the

a get year guidance, of midpoint Alan which estimate for in to XXXX LP's The the moment. full will Siding reflects updated

water normally follows file. is after the a can managed destocking business growth historic end with Siding you that backed As see, cycle trajectory of the the

million by our the about sales revenue fallen housing $X.XX And above accurate, will in X% XXXX's reached year to level By consensus fact, XXXX's have $X.X million XXXX. the is represents midpoint contrast, XXXX. In all-time starts full high. net of above in volumes and if guidance current

year. market over XXXX, percentage grown has Nearly share growth and market of XX% power in a the and nearly cumulative period we from The siding of XX% volume revenue finish volume of a siding demonstrates Starting which as clearly overall contracted shows X% right on QX serve. ExpertFinish chart underlying in gains of pricing and of revenue. to X expert this revenue in

you ongoing our many you price nickel Show other new growth add in and were siding, expert products the mix should saw and of us to [indiscernible] pebble launched Builders If able stucco all of to drive at uplift help in new the newly finish Las panels, and R&R. construction residential International join Vegas, which gap

share LP Siding and footing, clearly additional Our and is to of business leveraging normal gains. our back drive is growth growth specialized power portfolio to our the

one recently siding, partnership America's leading and homebuilders. OSB Lennar, Lennar Through will For solutions partnership, broad uniquely structural strategic respected of of a way most example, products. sustainable announced with a this provide we LP and with

also Home to We availability of trim Depot, expanded our Home extending SmartSide Depot stores the partnership the nationwide. with

make second on and growth continued quarter to OSB These launched R&R siding. leverage newly a increase inside additional beyond in in contractors. be mention leads modest in and and that These first high-quality turn, should to late share homeowners the driving meaningful impact and siding I factors had relatively in in impacts were the strategic largely the QX growth, our products OSB. continued results. prices gains with SmartSite to the our and the quarter innovation ability partnerships and available for Lennar beautiful partnership, enhance homes This, of customers' build and for more felt

year. uncertainty while remains, on turn questions. the to quarter outlook that, and the we for take updated and growth macroeconomic I guidance for more second Accordingly, increasing With are Alan we full in our quarter and before your our margins will detail

Alan J. Haughie

you. Thank

leverage Houlton, in both delivered quarter. was generated prices siding significant generation, and investments and to us, strong of a resume in dividend And in through million and this returned from the share said, of while investors drove flow behind operating volumes quarter Higher OSB healthy of million Sagola cash incremental cash for Brad million repurchases. $XXX the increased market $XXX $XX OSB this first margins. EBITDA As flow. capacity the Bath cash with LP

the the EBITDA, square encouraging positive of The mix contributing X% increased effects of the of products for resulting have the year, points. waterfall X which higher should on our to seen helped prebuy volumes adding XXX the X year. any prices is on Sales uptake with remaining X are X than last by year. Page $XX points Siding year-over-year price ExpertFinish minimization X% late note points were result than and I robust shows other last Average of points price the recently launched the quarter of comparison business. million annual increase selling realization roughly of X feet, million of by also the last higher

$X bulk added volume from came EBITDA. designed contractors repair Build and share of of customers. prepare is volume revenue. The construction remodel growth quarters $XX growth remodel both for a and delivered siding largest ExpertFinish, driving to which and residential volume million X% record our gains series and homebuilders in America's prefinished revenue and million This and with

due incremental export volume, this slightly to we finished record is might lower margin expect than Now EBITDA volumes. largely from additional

now. lower prime export than finished what margins are margins reminder, they are a As for

lower, utilization improving. the a export be addition to bath they finished gains improvement efficiency of While are facility network to last this to in prefinishing addition may they margin for trend. manufacturing to positive improvements in meaningful as finished time course, automated The finished highly in should LP's other contributed export margin the year. export efficiency compared in we continue and rates manufacturing grow And volumes, further this of

invest selling by the $X we million already is than and marketing, on continuing from are $X the This mill prior benefit As year-over-year we nonrecurrence incremental last incurring believe million in conversion more benefiting. offset we to discussed of year's calls, which from investments. are an

costs to continue And $XX costs of our more [indiscernible] addition may fully is largest of levels, from prices painting overhead. the as substantial the MDI enough single first neither risen, year. processes automated paint Sagola being unit more tailwind improving year's Freight at increased million raw for unit operational from the gains raw and simply the offset last last resin Bath to from of and were with prices. on is staffed component material efficiency moderate paint the of red EBITDA This million a the in Bath only $X have The waterfall usage bar material network this. reduced our than to quarter

But and [indiscernible] than margin with should incremental we fill see by those high that capacity, grows the of demand more as costs additional volume. offset to Sagola

and a utilization capacity to and at XX%. we of the times million investment capacity peaks capacity. over with that of as towards recently represents investment growing low compared high entirely principle of time quarter new online. with is this rising of margin the business consistent believe first new that EBITDA trough margin So fill rebounding Siding and we and peak the the what last low sign saw with a We comes year's troughs from $XX higher high utilization We've at as EBITDA in often added wave a times

higher commodity should Shifting that again EBITDA. once XX% the than million by of Solutions adding XX% higher, increase price Structural start selling Compared a to XX% dominated OSB prices prices average last to is I from base. were because year, waterfall prices, is The lower on $XX gain commodity out Page X. price. the in of mainly point

elevated prices However, of significantly quarter end remained recent of and most in our general, OSB until the April at pullback. the climbed first through

order the in our quarter. mostly have first at realized of higher duration of the quarter second Given been the files, prices the end

Sales meet for more allowed in Solutions, increases sales which of record was also OSB OSB from XX% Brad points said, a volume, of than in up production the to quarter demand. Structural volumes last accounted customer for incremental higher [indiscernible] OSB, X stronger volumes year. And as total sold XX% were

me, higher than for selling per was math, the solutions prices commodity to for X,XXX per indulge chart if let structural compare square the solutions EBITDA if briefly higher we're price, incremental Solutions foot foot data to $XX in structural about the of you and way. that data this value Using square me commodity. the volume, Structural $XX see the and do Solutions you'll different was thousand on to it you'll So about a average the on on demonstrate Structural EBITDA volume use this chart

does imperfect only entire incremental year-over-year specialization. and Of it therefore, the reinforces strategy Structural incremental population, but the delivers it changes, margin our course, this not is analysis Solutions it's directionally that demonstrate the as of ongoing uplift

$X As in material deflation raw of million EBITDA. contributed Siding in business, prices the

of and cost most work. impressive other year prices aggressive maintenance last positive very efforts may the bucket in business regular a kept footing in demand now are at EBITDA year's is control on deferral depressed nonessential the more while including OSB, that operations. time, For nonrecurrence face ago mostly this capital of the the the we demonstrated And and have for a back flexibility, an operational weak

resumed As have a maintenance result, more spending. we normal

Siding The the EBITDA of EBITDA quarter coincidentally, $XX of business the generated as represents the an million same in XX%. margin

and shows with million resulted an of it inflow capital uses lower improved the operating to flow Slide year. improved opposite and $XXX X factors, investments with EBITDA this build. down equal this in year last less almost cash time boils this And compared significantly and flow. when and The flow, of year million. cash the obvious $XXX Bath year investments year-over-year year of capital to completion Segala substantially this working this an cash higher this substantially operating to outflow of is comes last X

stated, with Brad repurchases. as capital So strategy, generating our allocation share we're and and consistent resumed have cash stated

X, which, on roughly powder buybacks growth the quarter. an And of million $XXX have for as Speaking first And share $XXX approved million which guidance our shareholder May future me XX. authorization Board returns, the has dry to Directors and updated more spent in to today. bringing authorization, of share $XX enough total XXXX, to our the we find $XXX spent remaining LP of to of million million as to in in of Slide million LP's support repurchases has including than with increase brings liquidity, $XX

and even For quarter quarter strong siding, continued second the demand first has accelerated. the into

that million we to to $XXX the XX% a in XX%. expect and second you'll As of forget of remember, I'm $XXX between quarter growth sure now we can revenue in and range be the revenue result, million somewhere the second $XXX representing quarter to therefore, scarcely order the weakest EBITDA rebound of million quarter margins the for of year last volume would resulting year for $XX million. comparable This the somewhat. and represents of magnifies XX%, sustain incremental in in the EBITDA the

expectations XX% for our to of $XXX a $XXX growth of full we're XXX to and guidance margin million Accordingly, points an the XX%. revenue basis year range our EBITDA for range raising full XX% year EBITDA to increasing by million to around

OSB, in the prices levels, current would For OSB assume million in to if at the we $XXX remain $XXX of range expect second we EBITDA million quarter.

we're the the but For average second predicting half guidance, modeling, for full year cycle of year. the not

guide year the the sum second with updated million method cycle of As obviously. of defined and numbers, $XXX to we quarter a same average, the is quarter, result, XX. full the Basically last actuals, $XXX as EBITDA quarter half then the but second introduced at our first on Slide guidance million

year $XXX about full our higher for year and Assuming to simplicity outlook. LPSA this EBITDA our brings that than full to net million previous $XXX million, to guidance $XXX million zero, corporate

it and specialization businesses we'll positioned leave our strategy your to well to to executing be strong summary, continue happy was quarter that, transformation. a And the year of growth, strong exceptionally that take start in So with a both and questions.

Operator

[Operator Our question Kurt Yinger Davidson. D.A. comes Instructions] with first from

Kurt Yinger

realize to you uplift just of to on into additional as QX the of didn't we back lever well biggest a maybe SG&A QX. the guess mind based start implied on siding. as that anything margins, look perspective guide, on saw from QX, What or production versus keep of I constraints wanted kind we sequential volume half if just cost in see what fully we kind versus in the is I kind kind off a of guess and of margin expansion I

Alan J. Haughie

will There Good really. moring, gap a slightly inherently less we are growing and few prime. production. And those are swing this to be increasing margins well, Bush smooth fences. And will give said, be than Alan speaking. product expert volumes the Nothing themselves is like those prime finish. And introductions, export efficient room we've lower current siding of the prime to to call as it, for than finished the we honest, are operating ourselves, the be and the

adding and volume this an believe, restart still some hit example, accelerating preparation the room And marketing as to do of means, may XX% additional if do that this commitment. kind we the with margin us to of which [indiscernible] that growth, that the we selling choose guide EBITDA for possibly or of gives that and spend,

Kurt Yinger

it. Got

could announcement. And you on Siding type Second, believe see do you've That what Okay. what was opportunities bit should talk testimonials them guess what's in I more makes for of I we've little business about then kind a in announced? Midwest. we do of just you think of some about sense. this around incremental Lennar the the the up kind hoping Mountain you opening well. specifically? And West as the guys with you I here how to related well seen

William Southern

done then a Well, significant what the siding we've historically. perspective over there's incremental -- from piece of volume a

currently but portfolio. a subregion And region, that every of was. volume pretty with the across were servicing country, much what's we obviously, geographies our every not so not assigned but that's are we was amount basically, converted, happening new And the Kurt significant siding

we're geographic So have this dealers to portfolio, we into expand opportunity experienced more up as builder drive the to beginning certainly provide Lennar. distribution main and realize with [indiscernible] volume expansion just the we opportunity Lennar, service to it carry provides even is that as a our series new will to as builder series growth orders, product accompanying pick for a construction but geographic uplift also it bigger of that reach, particularly were that the and that field, products for to so us into comes our for demand in vehicle there's the the

Operator

Weintraub comes Research next Seaport Our Partners. from with question Mark

Mark Weintraub

better very First, think in congrats, obviously, I anticipated. And a a quarter. fact, you good lot than originally had

color I'm sort if a so more get wanting of to And little possible. bit

the On EBITDA margin. Siding

had differently you expected? end than think been out basically XX% you and What you was below I What have played something different? XX%. guiding up at

Alan J. Haughie

I'll almost take answer everything. this is The one.

about -- my both in But with -- mentioned in of in better impact terms the the Let the certainly remarks, XXXX. the mix I essentially prepared sense also of me use additional in effect into mills that of there whole spent and to in we've of talking was that through of had the both in And prebuy. uptick that when last no carrying real that we pricing that in was terms year volume. the minor a investment showed of volume, benefits change labor in the absorb

revenue was QX, got place. So because the what we during got additional I'll throughput least call we label in -- revenue at material already minus at costs

thing of but that's upswing one of which so one the happened the us predict, that's of manage in fundamentally, an all not of for XXXX. preparation is that the that Collins through or doing QX, And benefits necessarily the collateral easy to all features

out really make well us the position maximum So revenue. of to value

had better-than-expected also We raw material performance.

raw efficiency, pricing, materials. So

So in other words, almost [indiscernible].

call And the much emerging, apparent this time. ultimately a when X try certainly very trend that convey not let's just it But beginning this numbers, degree fully for -- of, which call on was it at we that months emerge, justified. we not were ago, confidence obviously to but was it, think but was was to our in I was

Mark Weintraub

upside the the we second are some right entailed. of, as some prep quarter up also more way following think color of good Can end just there And Great. on surprises in bit guidance, about we kind to relatively chance that? up cetera. half a on And be a that I us bit you you or in types might to the first I a margins relatively little And obviously, in versus of et half? second decline a is little in of embedding be work question. we Kurt's Maybe with sharp what -- mean year. go guess, you saw that the would actions terms the alluded give maybe

margins in Sorry, EBITDA the [indiscernible].

Alan J. Haughie

is short Fundamentally, and at gave that's X we'll hit operating that confident to fundamentally room is yes, [indiscernible]. answer we're that just And it answer we longer to The XX%. yes. the us swing for the least fences, the The gives Mark.

So is the answer yes.

Operator

comes Goldman Our next Sachs. with question from Susan Maklari

Susan Maklari

we're question you're some broader about of and the the a came you ticket some you you just sustainability like first I that demand trends a new think And strength go broader year? talk bit categories. to Siding. guess, back you is how initiatives hearing larger relative of have together. about of product Spring, much feels discretionary in in that My how can it's you contrast to into how bit a do what on in the seeing the the type half we Can this other the do talk bit into space? And of is and think as forward this the company-specific relative products the about siding the quarter

William Southern

Yes, great Susan, question.

certainly the of put good, while sustainability but really we've guidance let short place of file, we tell do this order in for about excited So And I back me we're to for a you feel given first the QX the signing growth. the the I about normal anyway, believe in long-term that sustainability want seasonality. caveat cadence of equally look, term into a

going of the to in So -- quarter-over-quarter play be it's comparisons. going to to that's type

so our asking of products. the customers over that -- happened product the things. XX what's months X fundamentally, development for has have been are been launched real, new products But type we've and last One, or

of product mentioned standpoint a from those as So pricing, this, launches as Alan has the demand resounding. the success been as far

When new And lock that and finish [indiscernible] there and before. demand your those wasn't don't that out somebody have smooth expert open -- for products so up that new market. smooth of you opportunities

our market has product expanded just the that through new So development.

that from mind relatively world, in are our builder what series doing new standpoint. still And and keep a we're demand expert finish to in

ago. having builder say, nationwide the exist viable big that business, national then It product So expert the builders, to opportunities finish series a in offering. creates with [indiscernible] and demand access a having years really didn't

done in a in done remodel and remodel is ExpertFinish. are we're been one-step there. repair have putting for in has regions that and infrastructure still that to for year, we've where support Second That's leverage endeavor opportunities relatively new the And and still distribution us. finish we extent that strategy market. contractor built why -- and relationships and last of we underpenetrated work space, it's geographically, a out what the to been in facilities and have distribution we've able to we've still to that now these done Repair go-to-market establish large expert there's

builder. then is The there's well. to And have just actively we working getting certainly And on. a Lennar in see space that to but moment that XX that market watershed we're we finally, we're started gain other the big as deal continue targets us, for opportunities with share

So it sustainable. very certainly feels

pickup really X that been over year bit this just me some [indiscernible] round or if certainly off were inventory a of This saying, as has the let the kind volume way this that to growth. order we're last been well driver because adds spot. throughout Now year, so for year, right and little situation not where answer, and incremental which weak a the year, of Bob, file worked our a months now, of in X has out year, first to the [indiscernible] in fuel remaining we expecting

we QX as inventory kind good one-off what approached next any saw sustainable be year, little with road about people So we sustainability. QX, feel rocks more of get as just will in the aggressiveness good to QX growth, But trend. not a feel to about year-end. maybe being manage I we we There begin in

Susan Maklari

the I million color. that? full in the sales marketing for are Okay. $XX That's year? well $XX And anticipated. million can on what had actually just talk to what drove in came you below following Siding, you still spend great guess, does up then marketing And expecting just about we and

William Southern

just to can't costs up Yes. look, those turn -- on -- that's immediately. spigot the And are ramped you

to to to and bit that the as then the So find add building all It's programs for the talent, budget little easy companies closer we salaries. get probably executed start talent It's onboard cover and to built paying you the harder as try And season. a we that. as salespeople. get phase then

then we sales about would a the adds prior on gone have have the liked. that place slower have that's And levels that calls. from we're standpoint, to in So building up talked organizational we've marketing than we spend

Mark Weintraub

-- around detailed that's margin are I'm And essentially version Hopefully, more spending of dollars to will in I've and half. EBITDA we which bit that margin give succeed year, this second or would we haven't a a do have QX this year the liked. planning of sorry, would a to sorry, of QX -- to the as compared tried marketing expected we selling spent so, much of might in drag where have so far, we you have as

Operator

Our BMO. Mamtora from Ketan comes next with question

Ketan Mamtora

can would expert on that how to today, do But I strong the question, and imagine, you expect Maybe series you about expect for bit how over sort years you a big first big do fairly as Congrats be similar it finish, is quarter. little talk to of be a well? the say, let's small. builder where X next,

Aaron Howald

expert smaller XX% sorry, quarter, it deck different was a series referred earnings and to Brad -- on be revenue. there remains is of is started Export be the Ketan, revenue of volume, a X% we finish How percentage order volume. to be it you're series expect correct. hint to of that may Builder couple big than finish, points of in a X seen, but of Builder this price at at point. the that earlier. XXXX, in of X%

but reaches product example so mix customers siding in development quite new is it new the of to And the same in grow. effect, another have fully take-up it markets. new business for we expect And that that won't continue to the

Unknown Executive

highly series a good mentioned Builder as as about drags products host along whole of it other before, well. Yes. I've The thing profitable

creates own hay its it level. So

Ketan Mamtora

No, sort that finished Alan, margins Yes. prime at then, least. being you for talked now, about sense. makes below And of export

about this we finish when export with or you but flips X, think as quarter next not relationship think X margin? years, and is a look as the do So question, out, XXXX that you next

Alan J. Haughie

leadership Yes, the a in still say, competent we're I'm X have and we years of but blend -- the softball, not variable to strides. highly margin, process at reasonable in that that the X be first yes, quarter ExpertFinish I group next work high in a be we to year. in going last this said, first hope point, to significantly of I to is making if margin going earned disclose quarter variable still done, that [indiscernible]. which that's to we I'm I for a was automating You this but the mean there as great on the

themes, And of sort to that again, bank didn't QX of one return gave our when the guidance. to earlier on we we

better business of that we the aspect QX actually performance our so in And slightly performed in report than expected.

So strides. we're will can you situation back. step imagine, forward, But steps a it be as X X making of

the of in So perpetuity. take all we of don't and necessarily QX improvements kind inject in them

delighted So we're making progress it is an so with I'm ongoing But far. process of learning this. how to the do

Operator

from comes Truist Securities. Roxland Mike question Our with next

Michael Roxland

solid on a quarter. congrats

get mentioned conditions to Because OSB Day increase you you produce degree February, to OSB. I recall Should about at some a to talk through sense, market siding, in want Just any? you the your which can warrant. optionality of production Investor if

mills that capability, had to XX% ability signing your OSB. produce mentioned you think of our I

So siding more in capacity. prices the more wondering in I'm and took looking modest run-up given OSB modest capability. at advantage ramp if a of you that

William Southern

Yes.

Let me speak strategically. to that

know, our don't comes period, we've typically mill OSB have OSB. converted, the in OSB we for network, we've And So retain to that is And produce new the reason to mills larger when siding demand we've ability fill a a mills as that the online to intended converted immediate you the siding. over multiyear the facility up.

in the OSB and of it the And do maintain current ability may our not we the -- converting so we mill we while maintain not system. we're

as OSB the of advantage and for mechanism with semi-fixed what idle able so we take And cost time foresee the And QX facility and staffed so happened plant production. up that capability have network a we fill QX. to cover the we're signing what in the we to have retain in production in the to that where we basically happening

concerns so signing business improve. order primarily cost We little just done is that costs how we our or labor -- go it there file handled the on that's a siding any that transfer standard for will ease a idle optimization, just assets to internally. waiting And as So cost. to at OSB more in don't idle and have say, detail our this to segment OSB on -- production

the is in recognized for so business. our OSB OSB And revenue that

cost segment obviously -- standard But the and siding. cost manufacturing OSB a is

manufacturing. -- keep the So trying want to because revenue location product, not try by we by to we're segment or to cleaned

we so our North making the This is in picture, -- did quarter. -- minimal it's It's goes OSB that siding don't have currently assigned capacity. big region, a but of first quarter, in So we OSB have where all production make the from memory, in into network amount. first -- we so the in most Central -- are the

as the or be earlier, availability can pricing. if and network. network costs, semi doing force we're keep our on not variable capacity OSB we it on is something mentioned normally selling labor -- in so our active fixed that I market where we cover into would that It So only we And is opportunistic siding the constructively. semi OSB were a based based not present we on relying opportunistic

kind nature Mike, the a do a cover detail of question we but little So provide why take I if question, follow-up just happy to of strategically. a to I wanted your that around a didn't of bit

Michael Roxland

No, that's extremely Brad. helpful,

could on one follow if up question that. one Just

of but those, designing the OSB, revenue booked the the structure So with the it's the out segment. Siding of structure the but that revenue reported cost you're is capturing the using the revenue -- using cost way

William Southern

OSB reduction get the EBITDA that our gain business it because provides -- -- but that revenue is over -- do that or there standard, in reason cost the certainly, we siding helps Siding we're Exactly is recognized offset and cost cost is happens -- and a business it that whatever in any then helpful. getting the we margin standard transfer is in Mike, -- our cost margin that at and

a -- siding. -- So depending our our it's add OSB, pricing can then optimize OSB EBITDA and be in of a the cost EBITDA. And help it on significant our to health margin

Unknown Executive

siding the don't and business. signing of that a the you virtue network staffing people, a can we we goes mill. at to never and shift crews, can come and down we we otherwise gain experienced work the try pump When then it's volume exactly volume is QX, to business and what can when in and The trained I of and shifts have needing doing idea add that. and adding people reconfigure siding at as also shifts recruit patent this, -- and is and as the happened mill just it think continue by doing described then hire and in. capable much idea because signing not the we comes And they to out we do to the to is growth would of the we which we additional like are stick that capable

a So sort efficiency itself great it for it's got because the that sets to of the business up future benefit the success. collateral Siding of

William Southern

a detail. I little Yes. and just to great point that's just add a --

mill you're costs conversions of associated that of when OSB, a of big these manufacturing reason that. on the we it's not realm deal look, transitions with aesthetic, an aesthetic. as spent that those is great OSB, that training Quality goes -- that and we've There's of downgrade siding within into cost not experienced a because mill. in highly an a So is part the parameter for recently

the a happens it's those is investment. training facilities in major that So

making a major the in So workforce. we're investment

the shift to want do simplistic siding, have immediate mill demand. So be that run just have to reduction it, not siding what convert and to to staff mill to about for is make do volume a a the and lay don't we the then

facilities in so helps these make sizable conversions. us we these operations retain investments after consistency And at some OSB in

Alan J. Haughie

we'll Day, of the meeting of a Investor with analysis. the you use and the able on parts, guys that do investors of parts That's parts. one you closely, and whole the being the there's This is about -- in to one whole we think reasons some can talk business each is of we the has of sum reasons one greater symbiotic this. -- some than the And benefit why the if a

Michael Roxland

of EBITDA just look color. much the question, Great or how your recall over. siding as product it as should the And I'll be revenue contribution from that of would the siding more at mills through then of on accomplish duration fair that? this say to mill the you OSB it. came year, Got you and OSB One Do last siding segment, lessen to when running turn it progress [indiscernible] run you you itself.

Aaron Howald

was Yes, siding pretty in was X/X minimal. Mike, business amount mills the of between year-over-year It I enabled X/X the of by year-over-year in the and would OSB OSB say the increase that increase. the production volume

for very it impact the the would the business OEE, amount a a impact, well fair it's amount ready And It not in and by I those efficiency of us characterize has was helps as positive OSB increase guess, upside, siding way. volume of overtime mostly strong in a as huge dramatic not be the so operating combination of same enabled one. the facilities. but I but a the

benefit So that's came the obviously, uplift where as OSB. of accrues the the bulk from And well.

William Southern

do now. get answer typically, Michael, contract of some we do would But need? can detail the business do consistent production. question. siding our volume is demand for and the want siding level volume quarter-to-quarter and say, siding there's full market run we that a know next that contract be some If we've look we year. we But where add at in expected year into our that a to situation in We volume. a tend volume. should why your that we the -- system do We that to just there, that OSB to let typically, get is just of things volume to pretty one we done rest cover at because it me this to it contract once year, that OSB Then so requires to we

Just home to on that for market. to put not the having make have sure all and open we we're volume a it,

Operator

Ramsey with Our next TRG. comes question Steven from

Unknown Analyst

Brian [indiscernible] This Steven. actually on is for

channel builder there ExpertFinish, this product the year maybe SmartSide, rate Siding, the any tailwind Or of to the just of for kind on help time for commentary this I on inventory a outlook? guess one First is of [indiscernible]. series. Is healthy it

William Southern

normal what they But used not remember order inventories -- sales being it's file. Memory to even [indiscernible] to with what was The be. hard look, my

seasonal We are inventories. back to on pattern normal a

normal, I because normal certainly expert but so And has strong like a brought products little distribution characterize season. finish, high in would levels being in today's as inventory anticipation of summer a

and distribution builds February So through May work frame. historically, down inventory typically, time then inventories April, until October the beginning

channel. demand just for strange inventory build the good file. transparent it level to in about feel moving I order experiencing we we're in higher of want in really that There's probably healthy product is be order will the our anywhere no be the but means through. little But than But a that that levels November,

any channel So which inventory in mean, quarter, we certainly do not have we about I next guided the build concerns affecting, to.

Unknown Analyst

Okay. guess, to Really on I of, going XX% guide sending Understood. jump from X.XX the And secondly, margins then XX% X.X now maybe prior. a now. major versus sales

the anything and better helping of repeatedly like obviously that. impact sales or here before, efficiencies the margin volumes much raise that things and of guess stated major mix the kind initiatives on You've plants else is have I a margins. and how at of volume

William Southern

huge is these Volume production to is driver a margins. a volume huge --

clear. be Let's

to went order as volume least very continue price tremendous we And -- in facilities, very strong, -- our has into held of given expectations incremental sales increase implemented production really Alan stickiness sales outperform that our mentioned, the our some that's through to that January to at And quickly so have margins. lever there's it. and around as and health we then kind beneficial the very file, our of our

there. So confident we're

fall And of unexpectedly, as additive then MDI, has level been the a somewhat price well. resin

ability full but facilities these our just to primarily [indiscernible] a improve and And to our add to when keep or is is ability price, of full. driven in and exciting be any we mix this optimized and [indiscernible] big, mind, view long-term look, ability going So functional of -- running like get close and to fully to when kind for that -- margin business run by out, our mill.

So on that our similar of expert provide, lower these things average cost in because our they happening to siding add scale finish. the bath system we mills

the where a can so for large because efficiency comes inherent been come we're And of inherent has the a in these while, growth phase, ultimately that's the filling in up us incremental system. incremental it conversions and with growth still mill in margin

Operator

Our next TD Steuart with comes question Cowen. Sean from

Sean Steuart

to move thoughts you. With citing easy clearly momentum of on updated terms timing costs that forward. ones Any track. project Wawa of very couple and A for in much on capital

Aaron Howald

timing demand, to we to perfect and basis consistently. demand but expectations It's update our something Yes. never is weekly new we growth. Thanks, Sean. very of match The very, capacity is it additions a process that frequently perfectly evaluate on continue evaluate for a

volume ago. going I think is capacity. can Sagola the more the earlier is sooner you concrete X we faster certainly, see we're and the than want really, thing give the it to faster fill more that build Bath, uptake we we expectation you our the only months was of And and

Alan J. Haughie

there impact with this no year. Probably CapEx was on --

that see has same. stayed You the guidance our

this year. a nothing from the So perspective CapEx mean significant

Sean Steuart

Understood.

market is the on you to And in question in likelihood X any interested deck lot be There's updated next have the Second all on Brad, supply on a that just that these OSB the announcements been X industry capacity thoughts years. constraints on projects pace issues and that's these all growth. come by bringing those still into to constraints, fruition along constraints, other at lines. labor capital and suggested the

William Southern

all these to as mean and locations think to say -- there, secondly, permitting the market complexity one the -- for own Yes. planned that we too, for -- social some so I of of forward then about our I'll the takes experience, than would longer related planned. be initially go when getting and just the some in to has it talk now issues the

more So can't that view it. ones lot what long of of on the obviously, take a on these do the competitors kind do expansion. momentum board yet. eye of we're I We them our have of keeping But behind are not an capacity control, some with and

in initially know I will customers' the by market are much to capacity demand the too it's our planned online. can. some year. say, there online capacity our this all going one -- of rest don't good tried efficient because volume I our competitors and later for but we we'll the have the business meet than most that's a that our we to But it's couple feel announced bring coming And to so about year what have in to OSB way speculate do and to manage don't on -- but going are longer folks want about thing, been taken the I far, in

Operator

Capital Markets. question next Our with RBC McKellar from comes Matthew

Matthew McKellar

would trim color much announced you citing of noted You partnership on sales any outlook broader provide stronger month versus across a business. for expansion the year? specifically with the for bump you Depot, maybe the Home you sales the and at Could last the guidance attribute of Lennar, how you're to

William Southern

the No, both of when those -- we thinking back our I say last gave would originally were quarter. in guidance

last until earlier. added of X demand we're strength Friday, we my added those we It's last in just haven't report. mentioned up because I so got our script, haven't overall things think really I order what that. the file is because we And of a the responding in board, And from the in that to is time we that orders much just not creating that little across basically as is a of I that so all feeling It's have -- optimism about we're for outlook distribution demand the sectors with the Siding. mentioned share, bit is that across

we or Home be we to Those was into a it that not But signed Depot coming, quarter. signed up we specific, long deal. guided just we deals because time and are deal guidance not the we last Lennar have visibility did when increase a some

Operator

Staphos Our next George comes America. from question Bank of with

Unknown Analyst

the quarter actually currently traveling. for on George Hudson This on Staphos, Congrats is Lucas guys. he's

through home distributors, could please? center me vary trends they If ProContractor do-it-yourself and you and how guys and with just siting along between the walk

William Southern

you question, understand routes to standpoint to That demand across hard route those different seeing back little that it from to say the that differences a are let the to bit but market Was a different what so question? was or market. the me we

Unknown Analyst

Yes.

Just pro please? yourself, distributors, the trends between a overall to contractor and demand center home

William Southern

Okay.

basis is incremental things most home for the tram, in a be volume, place, like driver our of not we which, volumes panel put very home that have panel. business products a good strong way, to center for So particularly volume, center but new clear the to demand by

kind in what of reflective shed. that's seeing So we're of

percentage where new high Where access, For deals a as off are new market low construction, base. it regions discussed, had of we've result a growth we it's the opening strong. is we've of

lot a there. of So opportunity

And then feel and but market where incremental that, these for is contractors about good really opportunities we kind of like repair add as remodel, to add we of compounding that through one we access growth, compounding volumes builds the that driver of to one-step as that that a incremental as export upon finished so kind distribution, key but the far certainly represented numbers, we're itself has seeing. in

both back kind So say, channel. growth as not really at and remodel the it are products, new distribution good a growth, the but step with construction we consumer of end-user which good take new And home well goes for and then the retail area, as moving state well. there contractor at and through centers and distribution repair the and level

Operator

the Howald would Aaron to for closing like turn I back remarks. to over call any now

Aaron Howald

Okay. That our round remarks questions and of Thank prepared you, and a everyone. answers. concludes

the and a XXXX. Stay look for for QX Thank results us close full connecting the and updated discuss So forward year QX we'll we there. our bring soon. to safe, to you outlook and for call to joining again

Operator

This you. Thank the for you concludes your Thank conference. participation.

disconnect. now may You

Louisiana-Pacific (LPX) 8 May 242024 Q1 Earnings call transcript