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Date

Wednesday, Nov. 5, 2025, at 11 a.m. ET

Call participants

  • Chief Executive Officer — Brad Southern
  • Chief Financial Officer — Alan Haughie
  • President — Jason Ringblum
  • Vice President, Investor Relations — Aaron Howald

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Risks

  • Alan Haughie noted, "OSB prices spent most of the quarter barely above variable cost, driven by sluggish demand, particularly in the Southeast," resulting in a significant year-over-year decline in segment EBITDA and ongoing margin pressures.
  • Management guided to a $45 million EBITDA loss for OSB in the fourth quarter, with total company EBITDA projected "about $10 million lower than the sum of citing and OSB breakeven," according to Alan Haughie for the full year.
  • The South America segment is "struggling with a sluggish economy, and its results are not fully offsetting our corporate overhead at the moment," posing a drag on consolidated financial performance.

Takeaways

  • Total sales -- Down 8% year-over-year, primarily due to an extended trough in OSB prices and soft demand.
  • EBITDA -- $82 million, noted as a significant year-over-year decline driven by OSB market conditions.
  • Siding segment revenue -- Up 5% year-over-year, mainly from a 5% increase in average selling price and improved mix, exceeding internal expectations and guidance.
  • Expert Finish product volume -- Up 17%, representing 10% of overall siding volume and 17% of siding revenue.
  • Expert Finish price realization -- Average selling prices up 12%, with the naturals collection launch materially contributing to favorable mix impact.
  • OSB segment OEE -- Overall equipment effectiveness reached 80%, an increase of two percentage points from the prior year.
  • Operating cash flow -- $89 million generated in the quarter, with $84 million deployed for capital expenditures supporting Expert Finish and Structural products.
  • Ending cash balance -- $316 million, with over $1 billion of liquidity including the undrawn credit facility.
  • Siding EBITDA guidance -- Full-year EBITDA expectation reaffirmed at $430 million, with Q4 revenue guided to approximately $370 million and EBITDA around $82 million.
  • Total company EBITDA guidance -- Full-year EBITDA now forecast at $420 million, reflecting a $20 million improvement from the prior guide, but $10 million lower than the sum of segment targets owing to corporate and South America factors.
  • CapEx guidance -- Total capital expenditure guidance is being reduced further due to deferred OSB projects and optionality afforded by manufacturing network headroom.
  • Managed order file -- Demand for Expert Finish outstripped available capacity, resulting in a managed order file until incremental production comes online in early Q2 2026.
  • 2026 siding price increase -- Jason Ringblum said, "we are really targeting the net somewhere between 3%-4% in 2026."
  • OSB utilization rate -- Currently in the 67%-69% range, aligned with committed contract volumes rather than open-market sales.
  • Mill conversion strategy -- Management is evaluating a conversion of the Manawaki OSB mill to siding production, citing greater scale and likely improved capital efficiency over Holton; no near-term decision, with process extending several quarters.

Summary

Louisiana-Pacific (LPX 8.13%) announced CEO succession, with Jason Ringblum set to succeed Brad Southern in February, as the company highlighted the continuation of its transformation strategy. Management confirmed a 5% increase in siding segment revenue drove overall mix improvement, while consolidated sales and EBITDA declined due to continued OSB price weakness. Leadership identified Expert Finish as a key growth engine, supported by a strong managed order file and new capacity expected online next year. Despite muted OSB and South American results, management raised full-year EBITDA guidance to $420 million and reduced capital spending amid ongoing network optimization. The company revealed that price increases for siding are planned to average 3%-4% in 2026, and the decision timeline for a major mill conversion remains open several quarters due to less urgent capacity needs.

  • Aaron Howald clarified that current Section 232 tariffs do not impact OSB and siding imports from Canada, and "the importation of some heavy equipment categories into The United States is less favorable than it is into Canada currently," providing a potential equipment sourcing benefit for Canadian projects.
  • Ringblum provided that the Manawaki OSB facility offers potential siding production capacity of approximately 400 million feet, a scale advantage considered in mill conversion analysis.
  • Management stated that, if housing demand rebounds faster than expectations, existing flexible capacity and shifts would allow rapid response, ensuring supply for both North America and South America businesses.
  • Ringblum reported that despite current market softness in new construction, the company continues to observe share gains in the repair and remodel segment and believes Expert Finish growth has substantial runway given "our market share in that segment is tiny. Relative to the opportunity."
  • Haughie confirmed, "South American business is also struggling with a sluggish economy, and its results are not fully offsetting our corporate overhead at the moment," affecting consolidated profitability.

Industry glossary

  • OEE (Overall Equipment Effectiveness): A metric assessing manufacturing productivity, calculated as the product of availability, performance, and quality rates, used here to track mill operational efficiency.
  • Managed order file: A supply chain practice where customer orders are prioritized or rationed due to demand exceeding available production, used in this context for Expert Finish siding.
  • Section 232 tariff: United States import tariffs imposed on certain goods, here referenced as not currently applying to OSB or siding imported from Canada.

Full Conference Call Transcript

Brad Southern: Thanks, Aaron. Good morning, everyone. Thank you for joining us. As usual, I'll discuss some highlights from the quarter before Alan shares more detail about our results and updated guidance. After that, Jason, Alan, and I will be happy to take your questions. As expected, excited volume in the third quarter was flat. This result in a softening market, especially compared to the difficult comp from last year, reinforces our confidence in our ongoing share gains. 5% growth in Siding sales revenue driven primarily by price and a strong mix exceeded our expectations and guidance.

While we anticipated the normalization of demand in the shed component of our siding business, our expert finish pre-finish siding product, primarily designed for R&R applications, saw sales volumes increase by 17% year over year. The April launch of our expert finished naturals collection, which is a new line of nature-inspired two-tone colors, has contributed materially to a beneficial price mix effect. Expert finished accounted for 10% of overall siding volume, and 17% of overall siding revenue in the quarter, showing once again the power of smart site innovation to drive price, volume growth, and share gains. Inventory levels and sell-through rates held steady through the quarter.

Alan Haughie: Consistent with servicing seasonally normal demand levels. The only exception is expert finish, which remains in such high demand that we have implemented a managed order file until new capacity comes online early next year. Total sales in the quarter were down 8% compared to the prior year, and EBITDA of $82 million was also down significantly. The extended trough in OSB prices was the main drag on both metrics. We obviously cannot control OSB prices, but we can manage the OSB business effectively. And our teams did that exceptionally well in the face of what remains a difficult market. The OSB business achieved 80% overall equipment effectiveness or OEE in the quarter, up two points from last year.

Increasing OEE is never easy, and it can be particularly challenging when we are also managing our capacity with discipline to balance supply and demand. I want to congratulate and thank everyone on the OSB operations team who contributed to this impressive achievement. Our results are only possible because of our teams and the strong culture we have built. In the third quarter, Louisiana-Pacific Corporation was named one of the 50 best manufacturers in The United States by Industry Week, debuting on the list at number 24, and one of very few specialty building products manufacturers to be recognized. We were also named by Newsweek as one of America's most admired workplaces.

Finally, as you saw, I informed Louisiana-Pacific Corporation's board of my intention to retire this coming February after more than 25 years of service. It has been the honor of my career to lead a 4,300-person team. Ultimately, the job of a CEO is to build an engaged culture focused on safety, growth, innovation, and execution to deliver value long after he or she is gone. When we launched Louisiana-Pacific Corporation's transformation strategy, I was daunted by the challenges we faced and the aggressive goals we've set for value creation. I am proud to say that we exceeded those goals.

As Louisiana-Pacific Corporation's team and strategy have evolved, the magnitude of the opportunity before us has only grown, and our confidence that we can continue to execute our strategy and achieve our ambitious goals has never been stronger. Jason Ringblum and I have been friends and colleagues for over 20 years. He was instrumental in the development and execution of Louisiana-Pacific Corporation's strategic transformation. He led Louisiana-Pacific Corporation's OSB and EWP businesses for five years and for the last three led Louisiana-Pacific Corporation's siding business before being named president. This perspective makes him uniquely suited to serve as Louisiana-Pacific Corporation's next CEO. I have total confidence that with Jason, Louisiana-Pacific Corporation's future has never been brighter.

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

Alan Haughie: Thanks, Brad. Before discussing the results, I do want to take a moment to say that working for Brad has been a personal and professional highlight for me. And, while they may be tough shoes to fill, I can think of no one better suited for this task than Jason. And with that, slide seven of the presentation shows Siding's results for the quarter. As expected, the bulk of growth came from price. Average selling prices were up 5% with prime products up 3% and expert finished prices up 12%. And there were two mixed phenomena helping this along. First, as Brad mentioned, shared segment volumes normalized after a very strong first half.

And as I'm sure you'll recall, strong shed volumes have been a drag on prices earlier in the year, so part of the 5% year-over-year price performance this quarter is simply the lower mix of shed relative to primed and expert finished products. The other mix factor was within expert finish itself, where demand for Louisiana-Pacific Corporation's two-tone naturals and other higher-priced prefinished products drove outsized year-over-year price gains. This mix shift is also evident in the year-over-year volume column, which shows relatively flat volumes in total but within which prime volumes were down 1% and expert finished volumes were up 17%.

Selling and marketing investments, raw material inflation, and other factors were fairly typical, but there are some moving pieces in the other column that they're mentioning. You may recall that the third quarter of last year saw an unusually high EBITDA margin, in part because of delays in maintenance projects and the resulting inventory build. Impacts which then reversed in the following quarter. So much of what you see in the $20 million of other in this waterfall is the non-recurrence of those events from last year. Among them, inventory absorption is actually a double hit. I.e., we built inventory in the third quarter of last year, which boosted EBITDA, whereas this year, we've reduced inventory temporarily hurts EBITDA.

But in the long run, it's all just timing. Viewing the second half of the year in total simplifies the year-over-year comparisons considerably. The $2 million tariff impact is the retiree tariffs Louisiana-Pacific Corporation had been paying to import expert finish into Canada. Those tariffs were rescinded in late August, so we are not currently incurring that expense. Also, as I'm sure you're aware, the section 232 tariff announcements did not impact Louisiana-Pacific Corporation's OSB or siding manufactured in Canada and imported into The US. So other than minor tariff impacts on some of our raw materials, Louisiana-Pacific Corporation is currently bearing minimal tariff costs.

The OSB chart on Slide eight tells a simple if bleak story of soft OSB prices in a challenging demand environment. OSB prices spent most of the quarter barely above variable cost, driven by sluggish demand, particularly in the Southeast. Price realization fared somewhat better than expected due to a combination of the lag in contact oil prices and structural solutions mix. And while the small non-price variances mask it rather well, the OSB operations team played the hand they were dealt exceptionally well. Overall efficiency hit 80%, up two points from last year, and aggressive cost control helped the OSB segment outperform our algorithmic guidance.

Now superficially, this waterfall suggests that price is the only thing that matters in OSB. Perhaps a more accurate reading is that if price is this low, everything matters. I tip my hat to the OSB team for making the best of a very difficult market. Slide nine shows cash flow for the quarter, which, while straightforward, very much continues to reinforce the value of Louisiana-Pacific Corporation's transformation. $82 million of EBITDA translated to $89 million of operating cash flow after minor puts and takes for working capital taxes and interest. Solutions We invested $84 million in CapEx to support growth of Expert Finish and Structural as well as to ensure that our plants continue to operate safely and efficiently.

And after $19 million in dividends, we ended the quarter with $316 million in cash, over a billion dollars of liquidity including our undrawn credit facility. Which brings us to guidance on Slide 10. Regrettably, OSB prices have scarcely moved since the last call, so our fourth quarter OSB guidance has only slightly improved. The beneficial life factors that helped the third quarter have dissipated given how long prices have remained in the doldrums. So all else equal, price realization in the fourth quarter will likely provide less of a tailwind than it did in the third.

The resulting $45 million of EBITDA loss in the fourth quarter and breakeven for the year are, as always, algorithmic projections of current prices and utilization. For siding, we reaffirm our full year EBITDA guidance of $430 million. However, for the fourth quarter, the market has continued to weaken so we anticipate slightly softer growth. We still expect a year-over-year revenue increase in the coming quarter, but of about 3%, and this mostly from price. And much like the third quarter, we expect an outsized contribution from Expert Finish to both volume and price. We are therefore guiding to fourth quarter revenue of about $370 million and to EBITDA of about $82 million.

Now this slightly reduces our full year revenue growth rate from 9% to 8%. For revenue of roughly $1.68 billion while increasing our full year EBITDA margin guide to about 26%. Now our South American business is also struggling with a sluggish economy, and its results are not fully offsetting our corporate overhead at the moment. Therefore, total company EBITDA for the fourth quarter and full year are both expected to be about $5 million lower than the sum of the siding and OSB. Nonetheless, our expectation for full year total company EBITDA has actually risen by $20 million from $405 million three months ago to $425 million today. But we're also cutting our CapEx guidance.

There are two factors in play here. First, given the current emphasis on capacity management and cost discipline in OSB, we are deferring even more projects. In OSB. In siding, we're balancing steadily improving OEE and initiatives to optimize Louisiana-Pacific Corporation's entire manufacturing portfolio against the backdrop of persistent market softness. As a result, the sense of urgency that motivated Holton's expansion as the fastest route to additional capacity is now somewhat diminished. And this makes our OSB mill in Manawaki, Quebec a viable candidate for conversion to siding. An option we are now exploring.

So should we ultimately proceed down that path, it would most likely still provide additional siding capacity in advance of market demand, and would likely do so at a larger scale and with greater capital efficiency. So while we weigh these options, we have paused any further mill-specific spending while continuing the longer lead time mill agnostic investments. And with that, we'll be happy to take your questions.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of George Staphos with Bank of America Securities.

George Staphos: Thanks so much. I appreciate all the details, everyone. And know, I know everyone will say it. Congratulations, Brad and Jason, on the news, and we wish you continued progress and success in the next chapters. I guess the first question I had, Alan, if you could just give us a bit more detail in terms of the potential shift from Holton to Manawaki, what's behind it, you know, how will we ultimately see it one manifest itself versus the other in terms of operations and performance.

And the second question I had, you know, maybe more for Jason and Brad, there have obviously been some headlines in the last couple days about in the last couple weeks about, you know, marketing battles, some of your peers, extending relationships with some of the building products distributors to push product, that maybe is a more competitive backdrop. Would you agree with that? Does that, you know, change the way you market, or does that actually help you because your peers might have some other things that they're focused on relative to the siding business? Thanks, and I'll turn it over there. Thank you.

Alan Haughie: George, thanks for the questions. Before I we will address your two questions. Before we get to that, I've just realized that I did misspeak slightly in my prepared remarks a moment ago when I was describing the impact of LPSA on the full year EBITDA guide. In the fourth quarter, the difference between LPSA and corporate unallocated expenses is indeed $5 million. For the full year, as you'll note from the published materials that went out this morning, the difference isn't $5 million, but it's $10 million. And so just to be clear, the full year EBITDA is expected to be $420 million. Excuse me, or about $10 million lower than the sum of citing and OSB breakeven.

There's still an increase. On the preview guidance. Sorry. I've got a fog in my throat. Hold on. And now I'm gonna turn over the question on Manawaki to my friend and colleague, Jason.

Jason Ringblum: Yeah, thanks for the question, George. I'll touch a little bit on milk conversion options. I guess, when you think about it holistically, the beauty of our position here at Louisiana-Pacific Corporation is that we have multiple options. I'll go through those just quickly. We've mentioned them on previous calls, but you know, we have the opportunity to expand existing siding plants. So you know, imagine a line parallel to an existing line at a current siding plant. I also had the opportunity to convert additional OSB facilities in Aspen Wood Bass. So Manawaki, as Alan mentioned, is an option along with Peace Valley.

And then also the potential for a greenfield that would leverage sites that we own today in Wawa, Ontario, or Cook, Minnesota. With that said, what I would say is the decision on the next mill will really come down to timing. And capital efficiency really coupled with the network optimization benefits that any given option has the potential to add. So we're still assessing all of those options that I mentioned, but as Alan stated, you know, Manawaki has surfaced to the top here more recently just given the OSD market.

Then the second part of your just around the competitive dynamics, what I would say is generally, we have not seen a whole lot of disruption within the channel. I mean, this is the time of year where you know, new programs are being put in place. We're navigating RFPs with we're focused on our strategy and different customers. But, right now, we're just really trying to minimize the noise and continue to focus on gaining share.

George Staphos: Hey, Jason. Just a quick one. I'll turn it over. Aside from the fiber basket, for Manawaki, what else makes it potentially rise to the surface more quickly?

Jason Ringblum: Yeah. So Manawaki is a large OSB facility. So it's got the ability to produce 600 million to 650 million feet of OSB, which translates to call it, 400 million-ish of siding. So just the scale and relative cost position of that facility coupled with just the network optimization opportunities that it presents will all be factored into the analysis.

George Staphos: Okay. I see. Let me turn it over. I'll come back. Thank you.

Operator: Standby for the next caller. The next call comes from the line of Susan Maklari with Goldman Sachs. Go ahead. Your line is open.

Susan Maklari: Thank you. Good morning, everyone. And let me add my congrats to both Brad and Jason as well. Looking forward to working with you.

Jason Ringblum: Thanks, Susan.

Susan Maklari: My first okay. The first question is talking about the pricing environment in citing. You've traditionally announced an increase late in or sometime in the fourth quarter. For effective in early the following year. Just given the world that we're in and the varying dynamics around housing the consumer, how are you thinking about pricing as we look to 2026?

Jason Ringblum: Thanks for your question, Susan. I'll take that one. So as of, I guess, the last seven to ten days, we did announce a price increase very consistent with what you've seen us do in prior years. Along with that, we are managing our order intake to really minimize any sort of build in the channel in advance of our price increase. So you know, really, those orders that are placed throughout December and in our January order file will come at the new price list. So nothing unusual here. What I would say is increases vary by product category and geography, but we are really targeting the net somewhere between 3-4% in 2026.

Susan Maklari: Okay.

Operator: Thank you. And then turning to OSB, when you think about the environment that the builders are facing and the commentary we're hearing, especially from the big publics around pulling back on start to end this year and then even into early 2026. How are you thinking about balancing that capacity the near term pressures that are there relative to the longer term outlook for housing? And just adjusting the cost structure on a relative basis given those factors?

Jason Ringblum: Yes. So demand for OSB has certainly been soft for the better part of the year and as a result, our focus has really been on matching capacity to demand, no different than what we've done you know, in prior years where we've experienced soft markets. What I would say today is our utilization rate for OSB is in the high sixties. Which is essentially which essentially matches our committed volumes for the business. So what we felt is if we sell open market wood or bring cash wood to the market, largely, it ends up in lower prices. So right now, we're focused on really managing costs and optimizing our network relative to the demand we see today.

Susan Maklari: Okay. Thanks for the color. Good luck with the quarter.

Jason Ringblum: Thank you. Thank you.

Operator: One moment for our next question. The next question comes from the line of Ketan Mamtora with BMO Capital Markets. Please go ahead. Your line is open.

Ketan Mamtora: Good morning. Thank you. Brad, I wanted to extend my congratulations as well. I mean, it's been a remarkable transformation. This is a much company today. Than what it used to be even ten or fifteen years back. So congratulations.

Brad Southern: Thank you, Ketan.

Ketan Mamtora: And, Jason, look forward to working with you. Maybe to start with, can you talk a little bit about you mentioned shed volumes normalizing in Q3. Can you talk about sort of what you saw there in Q3 and what's contemplated by way of volumes as you think about Q4?

Jason Ringblum: So I would say, Ketan, and I'll take that one. I mean, throughout Q3, our order intake and sell-through rates were pretty consistent. In fact, I would say they held up better than maybe we anticipated given the broader softening in the housing and repair remodel markets. And I think that's a testament really to our commercial team and our focus on innovating around the needs of our end-user customers, specifically expert finish, smooth siding, naturals, as Brad mentioned, being great product additions that have helped offset the weakness in some of the market segments we play in.

Specific to shed, you know, what I would say is, yes, business has normalized in that segment, but we were up year over year. So we're very pleased with the progress we continue to make in that particular segment. And we see that continuing going into Q4 as well. Really, the softness resides more in the new construction segment, particularly in the southern markets. And we see a little bit more resilience in repair remodel especially in the northern markets where we have a more dominant share position.

Alan Haughie: Jason, I'll just add to that. Sorry, Ketan. I'll just add that historically, we've kind of seen a bit of seasonality in the shed business where our distributor partners and the shed builders tend to build some inventory in anticipation of spring and summer sales. And that kind of backing off as we get through the summer. And I think this what we saw seasonally in shed is pretty consistent with the historic trends that have driven our order file in the past.

Ketan Mamtora: Got it. No. That's helpful. And then just one more question. It seems like, you know, you are also sort of in the way you are selling sort of your siding products and your OSB products, it seems like there is some transition happening where you're trying to align both these products and select, you know, kind of more as a bundle. Can you talk to sort of you know, what is driving that move and what kind of reception you're getting with your customers?

Jason Ringblum: Yeah. I'll take that one Ketan. Appreciate the question. So back in April, we announced the integration of our OSB and siding businesses. And really the main reason for that was to better leverage our resources and better leverage the breadth of our product portfolio in the marketplace. So you're right. We are working on some bundling of programs to help us execute our segment strategies in all areas that we play in. But I would say we're still very much in the infancy stage of that process. We've made some good progress in the big builder segment, but it's still an area we're exploring largely.

Ketan Mamtora: Got it. No. That's helpful. I'll jump back in the queue. Good luck.

Jason Ringblum: Thank you.

Operator: One moment for our next question. Next question comes from the line of Sean Steuart with TD Cowen. Go ahead. Your line is open.

Sean Steuart: Thanks. Good morning, everyone. I'll extend my congratulations to both Brad and Jason as well. I wanna follow-up on the Manawaki pivot. Can you give us a sense of the timeline to at least start this project and when you think it might be producing siding product, and attached to that question, does the section 232 determination which exempts OSB and siding from Canada, does that factor into the decision at all? And I guess broader perspectives, the determination on section 232 sort of left it open-ended that the administration can consider changes to the assessments as time unfolds.

I guess the short question is, are you comfortable that this will be an extended or a permanent exemption for OSB inciting from Canada? I'll leave it there.

Aaron Howald: Yeah. Sean, this is Aaron. I'll take the 232 component of that question. I don't think anybody's comfortable that policies are current in the current administration, but I will say that the decision to shift to Manawaki, should we make it, will be a long-term decision based on our long-term expectations about the evolving OSB and siding markets. The current situation for the 232 tariffs is that neither of those products is subject to a tariff importing it from Canada into The United States. And perhaps a less understood component of the 232 discussion is that the importation of some heavy equipment categories into The United States is less favorable than it is into Canada currently.

So, for example, if we were to acquire a press or other large equipment for a conversion of an OSB plant in Canada, we would be able to import that equipment at a lower cost into Canada than into The US because of those tariffs. I would like to stress, though, that would be a potential benefit, but it's not a reason for the decision. The 232 issue is not the decision maker. It is noise that currently is a net benefit, but the long-term reasons for Manawaki, should we make that decision, would be that the fundamental market dynamics and the efficiencies that mill would bring.

Brad Southern: Sean, the way you know, the process is as you can tell, as we've gone you know, we try to be transparent on these calls and talk about the different options. And some rise to the top and then some fade from the top. And so it is certainly dynamic. But, you know, the evaluation that we do is financially driven long-term financial driven as Aaron said. And there are components that specifically to tariffs or you know, when you look at wood cost, you look at particularly network optimization. Manawaki is in a really interesting place for us when you align it with our existing infrastructure, including what we're doing around expert finish growth.

And so but as we continue to do the evaluation over the next several quarters, we'll continue to evaluate all options in the face of a good strong financial analysis. Then when we get ready to present to our board, you know, that's when the rubber hits the road around you know, crystallizing around one facility and being able to explain you know, from a return standpoint why that one was chosen. So more to come on that, but we did think it was worth mentioning Manawaki as a prime candidate or might perhaps the prime candidate right now given that we haven't talked about that much in the past.

Sean Steuart: Understood. And maybe just one follow-up there, Brad. I you know, part of this reordering of the options is the extent to which OSB markets unraveled here, the last several months. I mean, you've positioned this as it's a long-term decision based on optimization of the fiber basket, the portfolio you have, is there any read through on you view this OSB downturn as potentially extended beyond what we would normally see and you're considering Manawaki in that context as well, this could be a longer trough than we're accustomed to seeing for OSB?

Brad Southern: No. We were not intending to signal that at all. I mean, it certainly the, you know, the near-term outlook for OSB is pretty abysmal. But we believe in the business in the long term. Really, what put this one up was, as Jason mentioned, or I mentioned in the prepared remarks, the timing we were leaning on Holton because we felt that we could get there faster with a conversion.

And so when really, it's the overall softening in the housing outlook overall gave us say, another year of capacity in our existing network, which allowed us to take a step back and say, you know, if we're not as in much of a hurry as we thought we were in, six months ago, what are other options? And that's really when we started focusing in on Manawaki. Was not OSB related that drove that.

Operator: Stand by, please. I believe your mic just went out for a minute. Standby, Sean. Are you still able to hear me? Can you hear me well?

Sean Steuart: I can hear them. They're I cannot. No.

Operator: Okay. Great. I just want to double check. I'm gonna have them dial back in. If everyone could please stand by. Please stand by for a moment while we get everyone reconnected.

Brad Southern: Joe, can you hear us now?

Operator: Oh, yes. We can. Great. I can hear you. And, Sean, you're still there?

Sean Steuart: I am. I'm all good, guys.

Brad Southern: You can go on to the next. So you got so did you hear? I mean, that such a great it's probably the best answer of my CEO career, and I got cut off in the middle of it.

Operator: You're leaving on a high note. I think I got the gist of it. All good, guys.

Brad Southern: Thanks, Sean.

Operator: Stand by for our next question, please. The next question comes from the line of Mark Weintraub with Seaport Research Partners. Please go ahead.

Mark Weintraub: I don't know, Brad. I don't know if he should ask any more questions after that. That high note. But congrats to all, of course. So maybe just a little bit more on the thinking on the Manawaki, Holton. So, I mean, your volumes this year aren't that different from what you were expecting.

So, I mean, it seems to suggest that you're taking a little bit more of a cautious perspective on next year, and, obviously, it's pretty early, maybe help us think that through a little bit and when you say several quarters, does that mean you're kinda thinking you it's like a don't need it for close to a year later than what you would have initially anticipated wanting the volume up.

Brad Southern: Marcus, really, the key driver is we were forecasting internally improving housing starts, you know, at a pace higher than the current forecast is. And so when we were looking at you know, I don't know the industry adding 75,000 to a 100,000 new starts each year, year over year over year. You know, that was that was got us on a path of sooner rather than later on this conversion. But as we've looked at the most recent starts forecast that we follow, they're it seems pretty flat or low single-digit growth year over year. So that difference in outlook for housing you know, has given us some degrees of freedom on timing for it.

I will say know, it's been really nice to see Segola operating at the level that it's operating at now, which has provided a good bit of near-term headroom on that. And so but I do feel like the I mean, I do I know that the reason we were able to take a breath on expediting a mill conversion is halting as we just looked at the housing forecast that folks are putting out there. And as we aligned with that, felt like we had another year of time to make a conversion. Versus being very rushed.

And, you know, rushed caused us to go to Holton because it would be the quickest, but it also rush would have significantly increased the capital expense too. So I think we're in a good place to where we still got headroom that we need if housing was to get stronger than forecasted, which we certainly hope happens. We feel really good about having options other than Holton, which will be a little more capital efficient for us.

Mark Weintraub: Super. And maybe could you expand a little bit on that in terms of capital efficiency recognizing you're still in the evaluation stage? But order of magnitude how much capital might be required for a Manawaki conversion? And, also, does this mean that your cap spend in 2026 is actually gonna be more reduced than maybe what some of us would have been thinking previously?

Alan Haughie: Great questions, Mark. None of which we're really in a position to answer with sufficient reliability or confidence yet. You'll we'll deliver more on this topic on our full-year earnings call in February.

Brad Southern: Yeah. Fair enough. Great question. Sorry. We're just not in a not in a position to answer.

Mark Weintraub: Understood. And then just last if I could. So with the Sheds business, obviously, it had been quite weak last year. Much stronger this year. You give us any sense as to, where the sheds business? And I recognize even you guys don't have perfect visibility on this. But your best estimate is where that business is now relative to kind of trend line? Or, I mean, did we have some catch-up this year so that there is downside risk to next year in a normal environment or is it more that it was just so bad last year, these this really strong growth just got us back up to what you'd consider to be? Kind of a typical year?

Jason Ringblum: Yeah. I'll take that one. So what I'd say, you know, there was a fair amount of pull-forward demand in shed during COVID. So our business was very strong in those years, and to some extent, you know, we supported that segment to a higher degree than others while we were on a managed order file. That pullback that we felt in late 2023, 2024 I think, was a result of that. We've seen the shed business return back to normal levels. If not, maybe a hair better. A lot of the fabricators that we talk to are saying their business is up, you know, a couple points relative to kind of a normal rate.

So we feel good about that business, and, you know, it's been very for us through the years. And feel good about opportunities we have to improve our share position there as well.

Mark Weintraub: Thanks so much, and congrats both again.

Jason Ringblum: Thank you. Thanks, Mark.

Operator: One moment for our next question. The next question comes from the line of Kurt Yinger with D. A. Davidson. Go ahead. Your line is open.

Kurt Yinger: Great. Thanks, and congrats, Jason and Brad. I just wanted to go back to some of the comments just around the fourth quarter Siding volumes. Could you just talk about I mean, what you're hearing from your customers? In terms of maybe a little bit of demand degradation? And then how you know, perhaps managing inventory levels and the price increase factored in if at all?

Jason Ringblum: Yes. Thanks, Kurt. You know, what I've I guess I said this earlier, but, I mean, the process is very consistent with what we've done in prior years. You know, we look at historical purchases, kinda where demand is trending, and then come up with allocations for our distributor partners. And then obviously work with them closely through that process. If they're communicating that they're gonna short a customer on the other end, by no means will we hold them to that allocation specifically. So it is pretty fluid in nature. With the end goal being not to increase channel inventories as we go into the New Year and work through a price increase.

So far, yeah, I think that's been well received. And, you know, there are customers that, you are certainly asking for more. But that's something that we closely manage on a week-to-week basis.

Kurt Yinger: Okay. That's helpful. And then just looking forward to 2026 a little bit, I mean, what areas of deciding portfolio do you maybe have the highest conviction or visibility to at this stage in terms of delivering kind of above market growth and continuing the momentum? And separately, from a marketing or channel standpoint, kinda what do you most focused on there in terms of you know, strengthening your position, with different channel partners and whatnot? Thank you.

Jason Ringblum: I'll take that one as well. Know, what I would say is, you know, we've got very focused segment strategies for new construction repair, remodel, and then off-site, which includes shed, and manufactured housing segment. And those are three segments that we will be relentlessly focused on improving our share position in. And we're investing resources in all three pretty equally, maybe a little bit heavier in repair remodel. But we feel like there's an opportunity to continue to take, you know, a half point to a point of share of the addressable market on an annual basis as we think about the future.

Operator: Okay. Standby for our next question, please. The next question comes from the line of Adam Baumgarten with Vertical Research Partners. Please go ahead.

Adam Baumgarten: Hey, guys. Thanks for taking my question. Just on Finish, can you kind of update us on where margins are there? Especially with the managed order file currently?

Alan Haughie: Margins still have that there. Good, but they still have a long way to go. Under this current circumstances. So, again, I still see both outsized We've certainly had outsized price increases on expert So there's nothing but opportunity there.

Adam Baumgarten: Okay. Great. Thanks, guys.

Alan Haughie: Okay.

Operator: Thank you. Our last call comes from the line of Steven Ramsey. Steven's with Thompson Research Group. Please go ahead. Your line is open.

Catherine Thompson: Hi. This is Catherine Thompson in for Steven today. Thank you for including me on the Q and A today. Answered, you know, many, many good questions, but wanted to follow-up just on a few on expert finish and have been taking some share gains. But I suppose for the quarter and as you think about the year, can you parse out the drivers between channel versus winning shelf space and end market demand. And then against the second part of this is against a pretty challenging R&R market, how sustainable do you feel these market share gains are on a go forward basis?

Jason Ringblum: I'll take that one, Catherine. So we're very pleased with the growth that we've seen in expert finish after getting into the prefinished business. I think it was back in 2020. We are on a managed order file right now, but we have incremental capacity coming online at the '1, early Q2 next year. In the neighborhood of 50 million to 70 million feet. We believe that we've got a very strong value prop with our expert finish line and, you know, have only added to that with the naturals collection that was launched in April. And that repair remodel contractors really enjoy using that product. So we think the demand is sticky.

Obviously, you need to get the contractor to get placement in the channel with our dealer partners. That's really our focus going forward is getting downstream as much as possible to pull that demand through for our dealer partners.

Alan Haughie: Catherine, I'll just add to Jason's answer that the keep in mind that our market share in that segment is tiny. Relative to the opportunity And as our product gets accepted, as Jason mentioned, as contractors, get to use, and as you mentioned, as we secure shelf space with the one-step distribution network, There's just a ton of upside in our ability to continue to grow that expert finish line. And, you know, have a higher a much higher market share of a large repair and remodel market.

Catherine Thompson: Yeah. And do you need to step up marketing expenses next year to keep being that share gainer, or are there other ways beyond to increase stickiness?

Jason Ringblum: Marketing is a big component.

Alan Haughie: So you're gonna yours it's in it's in home selling. To consumers primarily And so as a you know, if you parse our sales and marketing budget, particularly the marketing budget, it is skewed toward support of the repair and remodel segment more than any other segment by a pretty large margin. But I think what you'll see next year in our budgeting will be consistent or with our guidance will be consistent with the kind of span we've had historically, especially if you look a percent of revenue or anything like that.

Catherine Thompson: And since you brought up distribution, given the ongoing changes and the landscape in The US are you seeing any type of behavior changes for you as a supplier to the distribution market given some of the fundamental changes in distribution?

Jason Ringblum: Yeah. I would say right now, know, we're very pleased with the partners we have from a two-step distribution perspective and that, you know, those relationships are on very solid footing and you know, we look forward to continuing to work with our partners, but no real significant disruption. No.

Catherine Thompson: Okay. Great. Thanks so much, and best of luck. And congratulations.

Alan Haughie: Thank you, Catherine.

Operator: Moment, please. One additional question comes from the line of Michael Roxland with Trist Securities. Please go ahead. Your line is open.

Michael Roxland: Yeah. Thanks, Brad, Alan, Jason, Aaron for taking my questions, and I'll just echo what everybody else has said. Brad, congrats on your upcoming retirement. Well deserved. And, Jason, congrats on the new role. A lot of my questions have been addressed, but I just wanted to ask if you guys if you could give us some more color around volume growth by end market in terms of single-family R&R and sheds and manufactured housing in 3Q? And how should we think about Siding volume growth as we look into 2026? I know it was asked recently, but just trying to get a sense whether you think volumes will be flat, slightly up next year versus low single digits? Thanks.

Jason Ringblum: So I'll touch on the first part of the question. Just looking at Q3 versus prior year by segment, As I mentioned earlier, even though shed volume came off slightly versus Q2, It was up over year over year more than the other two segments. Repair remodel was second strongest, as evidenced by our performance in our expert finish business or line. And then single-family, I think it was a mixed bag.

You know, we had decent volume in some of our core markets, but in the Southern markets that are dominated a little bit more by the big builder know, and are stressed by some affordability challenges and just consumer confidence in general, we have that was our weakest segment in the quarter.

Alan Haughie: I'm gonna address the second question briefly. It's I think it's too early for us to make a sort of convincing call on 2026. As you know, we have pretty good visibility within a quarter and when we get to February, what we see within the first quarter behavior will, of course, color our view of 2026, at which point we'll provide some full-year guidance.

Michael Roxland: Understood. And then just one quick follow-up. If you see houses in rebound more quickly next year than you're now expecting, what levers do you have available to meet that increased side demand now that you're pushing out some of your capital projects?

Alan Haughie: Plenty of capacity. We can add shifts in existing facilities. So, yeah, we will have no problem responding to almost any imaginable demand scenario over the next couple of years. In either of our businesses or South America.

Michael Roxland: Got it, guys. Thank you.

Alan Haughie: Yeah. Thank you.

Michael Roxland: You're welcome. Thank you.

Operator: This does conclude the question and answer session. Would now like to turn the call back to Aaron for closing remarks.

Aaron Howald: Okay. Thank you, everybody, for joining the call. We'll look forward to continuing the conversation and follow-up calls later today and throughout the quarter. Thank you very much.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.