Q1 2024 West Fraser Timber Co Ltd Earnings Call
Operator: Good morning, ladies and gentlemen, welcome to the West Fraser Q1 2024 results conference call. Please note that all lines have been placed on mute to prevent any background noise.
Good morning, ladies and gentlemen, and welcome to West Fraser Q1, 'twenty 'twenty four results conference call.
Please note that all lines have been placed on mute prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star and then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star followed by the number 2.
If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.
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Operator: During this conference call, West Fraser's representatives will be making certain statements about West Fraser's future financial and operational performance, business outlook, and capital plan. These statements may constitute forward-looking information or forward-looking statements within the meaning of Canadian and United States securities laws. Such statements involve certain risks, uncertainties, and assumptions which may cause West Fraser's actual or future results and performance to be materially different from those expressed or implied in these statements.
During this conference call West Fraser's Representatives will be making certain statements about Ross Fisher's future financial and operational performance. This is Atlas and capital plans.
<unk> may constitute forward looking information or forward looking statements within the meaning of Canadian and United States Securities laws.
That statements involve certain risks uncertainties, and assumptions, which may cause less pressure as actual or future results and performance to be materially different from those expressed or implied in these statements.
Operator: Additional information about these risk factors and assumptions is included both in the accompanying webcast presentation and in our 2023 annual MD&A and annual information form, which can be accessed on West Fraser's website or through CDER Plus for Canadian investors and EDGAR for United States investors. Please note that today's call is being recorded. I would now like to turn the call over to Mr. Sean McLaren, President and Chief Executive Officer. Please go ahead.
Information about these risk factors and assumptions is included both in their companion webcast presentation and in our China, China fee annual MD&A and annual information form, which can be accessed on west Fraser's website or through SEDAR play for Canadian investors and Etgar for United States investors.
Note that today's call is being recorded.
I would now like to turn the call over to Mr. Sean Mclaren, President and Chief Executive Officer. Please go ahead.
Sean P. McLaren: Thank you, Lara. Good morning, everyone, and thank you for joining our first quarter 2024 earnings call. I am Sean McLaren, President and CEO of West Fraser, and joining me today in our Quesnel office on the day of our annual general meeting are Chris Verostek, our Senior Vice President and Chief Financial Officer, Matt Tobin, our Senior Vice President of Sales and Marketing, and other members of our leadership team. As I mentioned earlier, later today, we will be holding our AGM where, among other things, we plan to discuss Our Progress with Sustainability Initiatives, some of the broader challenges that the North American lumber industry continues to face in adding meaningful supply, our recent track record allocating capital, including capital returns through buybacks and dividends, and the attractive long-term total returns realized by West Fraser stockholders.
Sean P. McLaren: Thank you Laura good morning, everyone and thank you for joining our first quarter 2024 earnings call.
Sean P. McLaren: I'm, Sean Mclaren, President and CEO of West Fraser and joining me today in our Cornell office on the day of our annual General meeting are Chris <unk>, Our senior Vice President and Chief Financial Officer, Matt Tobin, Our senior Vice President of sales and marketing and other members of our leadership team.
Sean P. McLaren: As just mentioned later today, we will be holding our AGM, where among other things we plan to discuss our progress with sustainability initiatives. Some of the broader challenge that the North American lumber industry continues to face, adding meaningful supply our recent track record allocating capital.
Sean P. McLaren: Including capital returns through buybacks and dividends and the attractive long term total returns realized by West Fraser stockholders.
Sean P. McLaren: On the earnings call this morning, I will begin with a brief overview of West Fraser's Q1 2024 financial results, and then pass the call to Chris for additional comments before I share some thoughts on our outlook and offer concluding remarks. West Fraser generated 200 million of adjusted EBITDA in the first quarter of 2024, representing a 12% margin. We experienced mixed results across our business again in Q1, with strength in our North American Engineered Wood Products segment and in the SPF lumber markets, partially offset by continued soft demand for SYP lumber products and in our European business.
Sean P. McLaren: On the earnings call. This morning, I will begin with a brief overview of West Fraser's Q1, 2024 financial results and then pass the call to Chris for additional comments before I share some thoughts on our outlook and offer concluding remarks.
Chris: West Fraser generated $200 million of adjusted EBITDA in the first quarter of 2024, representing a 12% margin.
Chris: We experienced mixed results across our business again in Q1 with strength in our North American engineered wood products segment as well as SPF lumber markets, partially offset by continued soft demand for S Y P lumber products and in our European business.
Sean P. McLaren: While new home construction in the US remained resilient through the quarter, supporting demand for OSB, and to a large extent SPF lumber, continued elevated mortgage rates appear to be constraining existing home sales activity and tempering repair and remodeling spending, which had a greater impact on SYP lumber demand. On a trailing four-quarter basis, adjusted EBITDA was $703 million, up from the $561 million we reported for fiscal 2023. On a pro forma basis, with the inclusion of NORBORD, this level of trailing four-quarter adjusted EBITDA is approximately $460 million higher than that of the down cycle in 2019, reflecting synergies from the NORBOR transaction, the benefits of our capital investment program, as well as the acquisitions and strategic initiatives we've undertaken in recent years.
Chris: While new home construction in the U S remain resilient through the quarter supporting demand for OSB and to a large extent SPF lumber continued elevated mortgage rates appear to be constraining existing home sales activity and tempering repair and remodeling spending which has had a greater impact on S y <unk>.
Chris: Lumber demand.
Chris: On a trailing four quarter basis, adjusted EBITDA was $703 million up from the $561 million, we reported for fiscal 2023.
Chris: On a pro forma basis with the inclusion of nor board. This level of trailing four quarter. Adjusted EBITDA is approximately $460 million higher than that of the down cycle in 2019, reflecting synergies from the <unk> transaction the benefits of our capital investment program.
Chris: As well as the acquisitions and strategic initiatives, we've undertaken in recent years.
Sean P. McLaren: Finally, our resilient balance sheet and $1.8 billion of total liquidity at quarter end remain strong, offering the financial flexibility with which to support our capital allocation strategy. With that overview, I'll now turn the call over to Chris for additional detail and comments.
Chris: Finally, our resilient balance sheet and $1 $8 billion of total liquidity at quarter end remained strong offering financial flexibility with which to support our capital allocation strategy with that overview I'll now turn the call to Chris for additional detail and comments.
Christopher A. Virostek: Thank you, Sean, and good morning, everyone, and a reminder that we report in U.S. dollars, and all my references are to U.S. dollar amounts, unless otherwise indicated. The lumber segment posted $10 million of adjusted EBITDA in the first quarter, improving from negative $51 million in the fourth quarter. Our North American EWP segment generated $188 million of adjusted EBITDA in the first quarter, up from $143 million in the fourth quarter. The pulp and paper segment generated $3 million of adjusted EBITDA in the first quarter, similar to the $2 million reported in the fourth quarter, while in Europe, adjusted EBITDA was a negative $1 million in the first quarter versus $3 million in the fourth quarter. Higher prices were the largest driver for the sequential EBITDA increase across our North American lumber and engineered wood products businesses, although increased shipments of SPF products also contributed meaningfully to the sequential improvement.
Chris: Thank you, Sean and good morning, everyone and a reminder, that we report in U S dollars and all of my references are to U S dollar amounts unless otherwise indicated.
Chris: The lumber segment posted $10 million of adjusted EBITDA in the first quarter, improving from negative $51 million in the fourth quarter.
Chris: Our North American AWP segment generated $188 million of adjusted EBITDA in the first quarter up from $143 million in the fourth quarter.
Chris: Pulp and paper segment generated $3 million of adjusted EBITDA in the first quarter similar to the $2 million reported in the fourth quarter, while in Europe. Adjusted EBITDA was a negative $1 million in the first quarter versus $3 million in the fourth quarter.
Chris: Higher prices were the largest driver for the sequential EBITDA increase across our north American lumber and engineered wood products businesses.
Chris: While increased shipments of SPF products also contributed meaningfully to the sequential improvement.
Christopher A. Virostek: Further, our lumber business benefited from the actions we took in January to curtail production at two higher-cost mills. In effect, we replaced that volume with production from other lower-cost mills. Cash flow from operations was negative $41 million in the first quarter, with our cash balance net of debt still at a healthy $174 million versus $361 million last quarter. The relative decrease in our cash balance reflects a combination of the typical seasonal build in working capital. 122 million in capital expenditures, plus the approximate $31 million of cash deployed towards share buybacks and dividends. With that brief financial overview, I will pass the call back to Sean.
Chris: Further our lumber business benefited from the actions we took in January to curtail production at two higher cost mills in.
Chris: Cash flow from operations was negative $41 million in the FERC order with our cash balance net of debt still at a healthy $174 million versus $361 million last quarter.
The relative decrease in our cash balance reflects a combination of the typical seasonal build in working capital.
$122 million of capital expenditures.
Chris: The approximate $31 million of cash deployed towards share buybacks and dividends.
Chris: With that brief financial overview, I will pass the call back to Sean.
Sean: Thank you Chris.
Sean P. McLaren: We are proud of the company we have built, with the geographic and product diversification that has allowed us to weather what has been a period of challenging markets, particularly in our lumber business. As seen in the right-hand figure on slide six, our North American EWP segment has generated nearly $750 million of adjusted EBITDA over the last four quarters, which has been a period of tougher cyclical conditions for our other segments.
Sean: We are proud of the company, we have built with the geographic and product diversification that has allowed us to weather what has been a period of challenging markets, particularly in our lumber business.
Sean: As seen in the right side figure on slide six our North American AWP segment has generated nearly $750 million of adjusted EBITDA over the last four quarters, which has been a period of tougher cyclical conditions for our other segments. It.
Sean P. McLaren: It is this diversity in our wood building products offering that has allowed us to generate more than $700 million of adjusted EBITDA on a consolidated basis over the last four quarters, representing a meaningful improvement from the down cycle of 2019. As an update to our ongoing portfolio optimization strategy, we recently completed two important transactions, namely the disposition of our Hinton pulp mill in February and, more recently, the disposition of our two BCTMP mills, which we disclosed earlier this week.
Sean: It is this diversity in our wood building products offering that's allowed us to generate more than $700 million of adjusted EBITDA on a consolidated consolidated basis over the last four quarters, representing a meaningful improvement from the down cycle of 2019.
Sean: As an update to our ongoing portfolio optimization strategy. We recently completed two important transactions, namely the disposition of our Hinton pulp mill in February and more recently, the disposition of our <unk> Mills, which we disclosed earlier this week.
Sean P. McLaren: We also announced in April the dissolution of our 50-50 joint venture at Caribou Pulp and Paper, where we are now the sole owner and operator of the mill, which better positions us to support the mill's needs as well as its talented workforce.
Sean: We also announced in April the dissolution of our 50 50 joint venture at Cariboo pulp and paper, where we are now the sole owner and operator of the mill, which better positions us to support the mill's needs as well as its talented workforce.
Sean P. McLaren: On balance, we believe the sale of the three pulp mills, along with many other recent adjustments to high grade our mill portfolio, will allow us to reduce the variability of our earning stream, while also improving a higher EBITDA floor through the cycle. Shifting to our outlook and concluding remarks. We expect to continue to face a number of market uncertainties over the near term. Having said that, we remain encouraged that inflation expectations and mortgage rates in the U.S. are below the highs of last year.
Sean: On balance we believe the sale of the three pulp mills, along with many other recent adjustments to high grade our mill portfolio will allow us to reduce severity ability of our earnings stream, while also improving a higher EBITDA floor through the cycle.
Sean: Shifting to our outlook and concluding remarks.
Sean: We expect to continue to face a number of market market uncertainties over the near term.
Sean: Having said that we remain encouraged that inflation expectation and mortgage rates in the U S are below the highs of last year.
Sean P. McLaren: Inflationary cost pressures have largely stabilized across much of our supply chain, and we do not expect to see any meaningful upward cost pressures over the near term. However, constraints to new supply are very real, particularly for the North American lumber industry, where net new supply growth has been essentially nil over the last several years, despite a number of strong up cycles. Of modest concern, as suggested on our Q4 2023 earnings call in February, unusually warm weather in Western Canada hampered our winter logging activities, limiting the accumulation of log inventories at some of our mills, which required us to take downtime at select SPF mills in the first quarter.
Sean: Inflationary cost pressures have largely stabilized across much of our supply chain and we do not expect to see any meaningful upward cost pressures over the near term.
Sean: Further constraints to new supply are very real, particularly for the North American lumber industry, where net new supply growth has been essentially nil over the last several years. Despite a number of strong up cycles.
Sean: Of modest concern as we are suggested on our Q4 2023 earnings call in February unusually warm weather in Western Canada hampered our winter logging activities limiting the accumulation of log inventories at some of our mills, which required us to take downtime at select SP.
Sean: <unk> mills in the first quarter.
Sean P. McLaren: The impact of weather on our log decks remains a risk factor to our near-term ability to manufacture and ship SPF lumber in Western Canada, and we continue to monitor the situation closely. For our lumber operations in the U.S. South, persistently weak market conditions are a challenge and have increased the downside risks to our near-term production and shipments of SYP in the region. In conclusion, while demand markets remain mixed early in 2024, and there are near-term challenges across our business.
Sean: The impact of weather on our log decks remains a risk factor to our near term ability to manufacture and ship SPF lumber in Western Canada, and we continue to monitor the situation closely.
For our lumber operations in the U S. South persistently weak market conditions are a challenge and have increased the downside risks to our near term production and shipments of <unk> in the region.
Sean: In conclusion, while demand markets remain mixed early in 2024, and there are near term challenges across our business. We continue to be pleased how our teams are performing all across west Fraser.
Sean P. McLaren: We continue to be pleased with how our teams are performing all across West Fraser. We remain confident that we have the right people, processes, and foundation to execute on challenges and opportunities as they unfold. As always, we remain optimistic about the continued growth in future demand for the types of sustainable and renewable wood products that West Fraser manufactures and for which the company is known. With that, we'll turn the call back to the operator for questions.
Sean: We remain confident that we have the right people processes and foundation to execute on challenges and opportunities as they unfold.
Sean: As always we remain optimistic about the continued growth and future demand for the types of sustainable and renewable wood products that west Fraser manufacturers and for which the company is known.
Speaker Change: With that I will turn the call back to the operator for questions.
Operator: Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by the number 1 on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star, followed by the number 2. If you are using a speakerphone, please flip your handset before pressing any key. Our first question comes from the line of Ben Isaacson from Scotiabank. Please go ahead.
Speaker Change: Okay.
Speaker Change: Thank you Sir.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the number one on your Touchtone phone, you'll USB ton front acknowledging your request should you wish to decline from the polling process. Please press star followed by the number Tim.
Speaker Change: We're using a speaker phone please lift the handset before pressing Alex.
Speaker Change: Our first question comes from the line of Ben Jackson from Deutsche Bank. Please go ahead.
Apariva: Good morning, this is Apariva on behalf of Ben. Congratulations on the quarter, folks. My first question is whether you can give us a sense of how customer buying patterns have, sorry, customer buying patterns have evolved over the quarter. I think last quarter, you'd mentioned that things looked stable. So wondering if there's been any evolution there.
Benjamin Isaacson: Good morning. This is <unk> on for Ben Congrats on the quarter folks. My first question is whether you can give us a sense of how a customer buying patterns have alright customer buying patterns have evolved over the quarter I think last quarter. You had mentioned that things look stable. So wondering if there's been any.
Evolution there.
Sean P. McLaren: Yeah, good morning everyone. Sean here.
Yeah.
Speaker Change: Good morning.
Speaker Change: Sean here I'll make a couple of comments then ask Matt to open to fill in what I Miss.
Sean P. McLaren: I'll make a couple of comments and ask Matt Tobin to fill in what I missed. I guess from our perspective, you know, we started the year stable and expected some more activity out of our R&R segment and our treaters, in particular, which really has been slower than I would say we would typically expect for the spring kind of season. And as a result, we've seen price pressure, in particular on Southern Yellow Pine.
Sean: I guess from our perspective.
Sean: Yeah.
Matt Tobin: We started the year stable you know.
Matt Tobin: And expected some more activity out of our R&R segment on our treaters in particular, which really has been slower than I would say, we would typically expect for the spring kind of season and as a result, we've seen price pressure in particular in southern yellow pine, maybe I'll just stop there and ask Matt.
Matt Tobin: Maybe I'll just stop there and ask Matt to weigh in on anything I missed, sir.
Matt Tobin: Weigh in with anything I missed there.
Matt Tobin: Thanks, Sean.
Matt Tobin: Thanks, Sean. I think that's correct.
Matt Tobin: I think.
Matt Tobin: I mean, as the R&R markets have slowed down, demand has slowed a little bit from our customers, particularly in SYP. But But, you know, I think long-term R&R is going to be. We're in a strong position with the age of housing stock, and it'll bounce back with affordability.
Matt Tobin: Thats correct.
Matt Tobin: As the R&R market to slow down.
Matt Tobin: Land has slowed a little bit down from our customers, particularly in FY <unk>.
Matt Tobin: But.
Matt Tobin: But we think long term R&R.
Matt Tobin: It's going to be.
We're in a strong position with.
Matt Tobin: With the age of housing stock and will bounce back with affordability.
Matt Tobin: Yeah.
Speaker Change: Perfect. Thank you and a quick follow up to that so.
Matt Tobin: Perfect, thank you. And a quick follow-up to that. So, when we consider R&R, and I know long term, you expect that the R&R segment will continue to push strong demand. So, when we do see some weakness in that segment, do you view that as demand deferral or demand destruction? So, is it just we're pushing out, someone is pushing out a remodel of a couple of quarters, or is it they're no longer pursuing that? Any thoughts there?
Speaker Change: So when you consider all right and I know long term you expect you expect that the R&R segment will continue to push very strong demand.
Speaker Change: So when we do see some weakness in that segment do you do you view that as demand deferral or demand destruction. So is it just we're pushing out someone that's pushing out.
Speaker Change: Remodel a couple of quarters or is it there are no longer pursuing that.
Speaker Change: Any thoughts there.
Matt Tobin: I think we would, you know, consider that demand deferral. I think, you know, like say, with the age of housing stock, we believe that R&R is well positioned for the long term. And, and right now, it's just around affordability and market dynamics.
Speaker Change: I think we would consider that demand deferral I think.
I can say what the age of housing stock and we believe that R&R is well positioned for the long term and right now it's just around the affordability and market dynamics.
Speaker Change: Thank you.
Speaker Change: Yeah.
Operator: Our next question comes from the line of Hamir Patel from CIBC Capital Markets. Please go ahead.
Speaker Change: Our next question comes from the line of Javier <unk> from CIBC capital markets. Please go ahead.
Hamir Patel: Hi Sean, given how low prices have fallen in the South, are you surprised we haven't seen more curtailments in the region from some of your peers that are perhaps higher cost? And what do you think's been holding producers back from announcing shots?
Hi, good morning.
Javier: Sean given how low prices have fallen in the south are you surprised we havent seen more curtailments in the region from some of your peers that are perhaps higher cost and what do you think's been holding producers back from announcing shuts.
Sean P. McLaren: Yeah, good morning. Good morning, Amir.
Sean: Yes, good morning, good morning Amir.
Sean P. McLaren: You know, again, not a lot of visibility into what everybody is doing in the south; I can only speak to what we're doing. Of course, as we announced early in the year, we took pretty strong action with the curtailment of the indefinite curtailment of Huddig and the closure of Maxville, you know, and we continue to run, you know, first our economics, secondly, our customer needs. And when those things line up, we function, and when they don't fit, we take action.
Sean: No.
Sean: Again, not a lot of visibility to what everybody is doing in the south I can only speak to what we're doing of course as we announced early in the year, we took a pretty strong action with the curtailment of.
Sean: Of the indefinite curtailment of hot egg and the closure of Max Phil.
We continue to run.
Sean: Two first our economic secondly, our customer needs and when those things lineup, we operate in and when they don't fit we take action and I think in the sell side I can't speak to what others are doing but.
Sean P. McLaren: You know, and I think in the south, I can't speak to what others are doing, but you don't really have the ability to build big inventories in the south. So I think probably people would behave like we are, which is reacting to what your inventories are doing and what you can move into the market.
Sean: But you don't really have the ability to build big inventories in the south So I think probably people would behave like we are which is reacting to like your inventories are doing and what you can can move into the market.
Sean P. McLaren: Fair enough. And Sean, I wanted to ask you about the pulp and paper side. You've taken full ownership now of the Caribou Mill. How big a CapEx investment in the coming years would you expect to need to commit there to keep that mill viable over the long term?
Speaker Change: Fair enough.
Speaker Change: So I wanted to ask you about on the pulp and paper side, you've taken full ownership now.
Speaker Change: Caribou mill.
Speaker Change: How big a capex investment in coming years would you expect.
Speaker Change: Do you need to commit there to keep that mill viable over the long term.
Sean P. McLaren: Well, you know, what I would say there, Hamir, caribou pulp is, as we've talked about multiple times on these calls, in the capital that needs that were required at Hinton, caribou pulp's in a very different place. I mean, the asset's approximately 20 years younger. It's been well maintained over the years. You know, saying that craft mills require, you know, a meaningful shutdown every couple of years and every year, some level of shutdown, but we don't, and things can always happen, but we don't foresee any major capital needs outside of what I would call ongoing regular maintenance at a craft mill.
Speaker Change: Well, what I, what I would say Theyre Humira is is cariboo pulp is as we've talked about multiple times on these calls and the capital that needs that were required at Hinton caribou pulps and a very different place I mean, the assets approximately 20 years newer it's been well maintained over the years, saying that Kraft mills require.
Speaker Change: A meaningful shut down every every couple of years and every year some level of shutdown, but we don't.
Speaker Change: Things can always happen, but we don't foresee any major capital needs outside of what I would call ongoing regular maintenance at a Kraft mill.
Speaker Change: Okay, great. Thanks, Ron.
Matt Tobin: Great. Thanks, Sean. That's all I had on the pulp side. And just a final question for Matt. It looks like your lumbar realizations fared quite a bit better than the benchmarks and at least what one of your peers had been pointing to. Any thoughts on what kind of drove the relative strength?
Speaker Change: On the sorry on the.
Speaker Change: Pulp side and just a final question for Matt It looked like your lumber realizations fared.
Matt Tobin: Quite a bit better than the benchmarks in at least one of your peers had been pointing to.
Matt Tobin: Any thoughts on what kind of drove the relative strength.
Matt Tobin: Um, you know, I guess, you know, probably just maybe get down to mix or, you know, can't really comment on what our peers are doing. But it might just do with mixing the quarter that we'll average out over time.
Matt Tobin: Oh.
Matt Tobin: I guess.
Matt Tobin: Probably just maybe it's down to mix or.
Speaker Change: I can't really comment on what our peers are doing but.
Speaker Change: It might just deal with mix in the quarter that.
Speaker Change: We will average out over time.
Speaker Change: Okay Fair enough, that's all I had I'll turn it over thanks.
Matt Tobin: Sure enough, that's all I had. I'll turn it over.
Speaker Change: Thank you.
Operator: Our next question comes from the line of Ketan Mamtora from GMO Capital Markets. Go ahead, please.
Speaker Change: Our next question comes from the line of Keith.
Keith: And then Florida from BMO capital markets go ahead. Please.
Ketan Mamtora: Thank you and good morning, everyone. First question, maybe related to your earlier comments, Sean, around SPF inventories being below normal levels on the log side. To be clear, is there any way to sort of quantify where your log inventories are versus, you know, sort of typical levels for this time of the year, just sort of a rough order of magnitude?
Keith: Thank you and good morning, everyone.
Keith: First question, maybe to your earlier comment Sean around SPF inventories being below normal levels.
On the loss side to be clear is there is there any way to quantify bejar log inventory versus.
Florida: Typical levels for this time of the just sort of rough order of magnitude.
Sean P. McLaren: Yeah, good morning, Ketan.
Sean: Yes, good morning, Keith.
Sean P. McLaren: You know, I guess the way I would quantify it is that we've got a couple of places where we came in below what our target targets would have been. And what that really means, that we've just flagged it as a risk, it means we need to have a little earlier start to our delivery season. We typically wouldn't be expecting to bring logs in from Western Canada till the second half of June or late June.
Sean: You know I guess the way I would quantify it as we've got a couple of places where we were we came in.
Keith: Below what our target targets would have been and what what really that means that.
Speaker Change: We've just flagged it as a risk it means we've we need to have a little earlier start to our delivery season, we typically wouldn't be expecting to bring logs and in western Canada until the second half of <unk>.
Speaker Change: June or late June.
Sean P. McLaren: You know, we've got a few sites where we're going to need to start hauling wood earlier than that, and I think our team's done an excellent job of staging product roadside and having us in position to be able to haul that. But we are going to need some support because, you know, the conditions are very dry. There's, there's, there's a fire risk in both provinces. So we're going to need things to kind of align for us to be able to do that. I wouldn't look at it, though, as, you know, we're talking about a couple of mills in our portfolio of a dozen mills here.
Speaker Change: Got a few sites, where we're going to need to start to Hollywood earlier in that you know and I think our team has done an excellent job of staging.
Speaker Change: Our product road side, and having us in position to be able to haul that but we are going to need some support from the <unk>.
Speaker Change: Conditions are very dry.
Speaker Change: Fire risk in both provinces, so we're going to need things to kind of align for us to be able to do that I wouldn't view it though as you.
Speaker Change: We're talking a couple of mills and our portfolio of a dozen metals here.
Speaker Change: Yeah.
Sean P. McLaren: Understandable. No, that's helpful. And just one follow-up on that. Have those production disruptions of those two mills still continued into Q2 or into April at this point, or have you guys been able to manage them?
Speaker Change: Understood No that's helpful and just one follow up on that.
Speaker Change:
Speaker Change: Production disruption at those two mills.
Speaker Change: Still continued into Q2 are already into April at this point.
Speaker Change: You guys have been able to manage it.
Sean P. McLaren: No, we've been able to manage it. We took some forward action in Q1 to ensure that we had log inventories to at least get us through the early part of June. And we have plans in place, you know, weather permitting, to be able to operate normally through the period. But we flagged it as a risk because if weather conditions change or we have disruption in the forest, you know, it's going to impact a couple of our plans.
Speaker Change: We've been able to manage it we took some.
Speaker Change: Board action in Q1 to ensure that we had log inventories to at least get us to the early part of June and we have plans in place so weather permitting to be able to operate normal lab through through the period, we flagged it as a risk if weather conditions change or we have disruption in the forest.
Speaker Change: It's going to impact a couple of our plants.
Speaker Change: Okay now thats helpful.
Sean P. McLaren: Got it. Now that's helpful. And then switching to OSP. Can you just update us as to kind of where Allendale is with the ramp-up and where you expect that mill to be by the end of this year in terms of rate of production? I know you flagged kind of a pretty extended ramp-up period in your release, but I'm just curious about what you're seeing or what you're expecting for 2024.
Speaker Change: Then switching to OSB.
Speaker Change: Can you just.
Speaker Change: Update us as to kind of bear Allendale is.
Speaker Change: With the ramp up and where you would expect that to be by the end of this year in terms of fleet of production I know you flagged.
Speaker Change: A pretty extended run.
Amp up yet and in your release, but just curious kind of what you are seeing.
Speaker Change: What are you expecting for 'twenty four.
Sean P. McLaren: Yeah, no, the first thing I would say, Ketan, is that I am very pleased with the progress that we're making at Allendale and the team we have in place there. That mill started in July of last year, and so we're 10 months later. The mill is going to take two to three years to ramp up, and I would say when you look at the capacity of the mill and sort of look out three years from when we started, you know, if you drew a line, a startup line, it would probably be, you'd probably end up pretty close in terms of where we'd expect to be by the end of this year. Saying that, you know, we're happy with It's going to lower our cost footprint in our OSB business, which is the reason we bought Allendale, and we're well on track to deliver it.
Speaker Change: Yeah, and obviously the first thing I would say they are keeping us.
Speaker Change: Very pleased with the progress that we're making at Allendale and the team we have in place there that mill started in July of last year and so we're we're 10 months later.
Speaker Change: The mill is going to take two to three years to ramp up and I would say when you. When you look at the capacity of the mill in and sort of look out three years from when we started.
Speaker Change: Drew a line of startup line it would be probably you'd probably end up pretty close in terms of where we'd expect to be by the end of this year.
Speaker Change: Saying that.
Speaker Change: We're happy with the progress, it's going to lower our cost footprint in our OSB business, which is that which is the reason, we bought allendale and and we're well on track to deliver that.
Sean P. McLaren: Okay. And just one final question from my side before I turn it over. To an earlier question around R&R demand, have you seen outside of seasonality, obviously, as we move through April, May, and June, activity picks up, but outside of seasonality, have you seen any change in the demand pattern, whether sort of, you know, any slowdown or, you know, has it kind of largely been stable with this recent uptick in interest rates? Just curious about that.
Speaker Change: Understood and just one final question from my side before I turn it over.
Speaker Change: Glenn earlier question around R&R demand.
Speaker Change: Have you seen outside of seasonality, obviously as we move through April and May and June activity picks up but outside of seasonality.
Speaker Change: Have you seen any change in the demand pattern.
Speaker Change: Sort of.
Speaker Change: Any slowdown or has it kind of largely been stable.
Speaker Change: With the recent uptick in interest rates just curious about that.
Matt Tobin: I think we've seen a slowdown in R&R demand across our different products. Like I said, I don't I don't think we think it's a long-term issue. We think that we're well positioned for R&R in the long term, but certainly this quarter, we've seen across our segments just weakened customer demand around R&R. Okay, that's
I think we've seen a slowdown in R&R demands across our different products.
Like I said I don't think we think it's a it's a long term issue, we think that we're well positioned for R&R on the long term, but.
But certainly this quarter, we've seen across across our segments just to weaken customer demand around R&R.
Speaker Change: Okay.
Matt Tobin: Okay, that's helpful. I'll jump back in the queue. Good luck. Thank you.
Speaker Change: I'll jump back in the queue. Good luck. Thank you. Thank you.
Speaker Change: Yeah.
Operator: Our next question comes from the line of Sean Steuart from TD Kallen. Go ahead.
Speaker Change: Our next question comes from the line of Sean Stewart from TD Cowen go ahead. Please.
Sean Steuart: Thank you. Good morning, everyone. Matt, I just want to follow up on that last point when you talk about a slowdown in R&R volume. Can we put some percentage numbers around that quarter over quarter, are we talking mid-single digit volume declines, just trying to get better granularity on what's happening across various demand channels.
Sean Steuart: Thank you good morning, everyone.
Sean Steuart: I just wanted to follow up on that last point when you talk about that.
Sean Steuart: Slowdown in R&R volumes.
Sean Steuart: Can we put some percentage numbers around that quarter over quarter or are we talking mid single digit volume declines just trying to get better granularity on on whats happening across various demand channels.
Matt Tobin: I would say, you know, we don't have perfect visibility into the end markets around that, but, but, you know, there are customer segments that anecdotally are what we're reporting, and that's what we're seeing through the typical channels that we see those products move for R&R. So I can't give you an exact percentage because we don't have that visibility, but we certainly feel that slowness through the channels that we typically move our products through to support R&R.
Sean Steuart: I would say, we don't have perfect visibility to the end markets around that but but there are customer segments.
Sean Steuart: We're reporting and that's what we're seeing through the typical channels that we see those products move for R&R. So I can't give you an exact percentage because we don't have that visibility, but but we certainly are.
Sean Steuart: Thats bonus through the channels that we typically move our products through to support R&R.
Sean Steuart: Okay.
Sean P. McLaren: Okay, and on lumber with respect to finished goods inventories through the distribution channel, you guys in comps have positioned it as lean, but I'm hoping you can reconcile that characterization with prices sort of spinning their wheels here, looking for traction, any updated thoughts on finished product inventory that feels like it's pretty low at the middle level, but what you guys are seeing through. Supply Chain, and an end.
Sean Steuart: On lumber with respect to finished good inventories through the distribution channel you guys in comps the last few quarters.
Sean Steuart: Pretty routinely positioned it as lean.
Sean Steuart: But I'm, hoping you can reconcile that characterization with.
Sean Steuart: Prices sort of spinning our wheels here looking for traction.
Sean Steuart: Any updated thoughts on finished product inventory that feels like it's pretty low at the mill level, but what you guys are seeing through them.
Sean Steuart: Through the supply chain and end markets.
Sean P. McLaren: Yeah, good morning, Sean. Sean here. I'll make a comment on that, and then Matt will pitch in.
Speaker Change: Yeah, Good morning, Sean.
Speaker Change: Sean here I'll make a comment on that and then ask Matt.
Sean P. McLaren: I think I missed, you know, really tough for us to speak to what's happening. It is, you know, difficult to see what it is across the supply chain; we can only speak to our inventories and our customer buying patterns. You know, our inventories are normal, and our customers appear to buy when they need them, so nobody seems to be under a lot of pressure to buy. So there's not, at least we're not feeling anybody building inventory because they're concerned about supply. So anyways, I would just leave it at that. But hard, hard for us to really give you a sense of what it is across the whole system.
Matt Tobin: It's in anything I, Miss really tough for us to speak to what's happening.
Matt Tobin: As.
Sean: You know it's difficult to see what it is across the supply chain, we can only speak to our inventories and our customer buying patterns.
Sean: Our inventories are normal and our customers appear to want to buy when they need it so nobody seems to be under a lot of pressure to buy so theres not.
Sean: At least we're not feeling anybody building inventory because they are concerned about supply. So anyways I would just leave it at that but hard hard for us to really give you a sense on what it is across the whole system.
Christopher A. Virostek: Okay, thanks for that, Sean. Just one last question, maybe for Chris. The $11 million quarter-over-quarter decline in operating costs that was referenced in the waterfall slide in the deck, how much of that is tied to the U.S. South's optimization initiatives? And can we expect follow-on progress on that front in the coming quarters, or is that a step function change and a new level, and we should expect that same level going forward?
Speaker Change: Okay. Thanks for that Sean just one last question maybe for Chris.
Chris: The $11 million quarter over quarter decline in operating cost that was referenced in the the waterfall slide in the deck.
Chris: How much of that is tied to the U S sales optimization initiatives.
Chris: And can we expect follow on progress on that front in the coming quarters or is that a step function change in a new level and you should just.
Chris: They expect that same level going forward.
Christopher A. Virostek: Well, I'd say this is kind of how we're thinking about it as we look at the next several quarters. You know, we've seen a little bit of the lower price. We've seen a little bit of stumpage relief in Canada. That's been a tailwind for us.
Chris: But here's here's kind of how we're thinking about it as we look at.
Chris: The next the next several quarters.
Chris: We've seen we've seen a little bit of a with the lower prices, we've seen a little bit of stumpage relief and in Canada. That's been a tailwind for us that's benefited us on the on the cost side.
Christopher A. Virostek: That's benefited us on the cost side there. As you know, we said, the Fraser Lake impact of that won't really be felt until the third or fourth quarter as that mill winds down through the balance of this quarter and the inventory gets liquidated there, and we, you know, we wind up operations there. The closure of the two mills in the US South was, you know, a much more expeditious process given how lean the inventories are typically in the South, and those mills wound down operations quite quickly.
Chris: There.
Chris: You know the Fraser Lake the impact of that won't really be felt until the third or fourth quarter as that mill winds down through the balance of this quarter and the inventory gets liquidated there.
Chris: We wind up operations there.
Chris: The closure of the two mills in the U S South was.
Chris: A much more expeditious process, given how lean the inventories are typically in the south and in those mills wound down operations quite quickly, but what we did there was as you could tell from the shipments as we effectively.
Christopher A. Virostek: But what we did there, as you can see from the shipments, is we effectively replaced that volume at our other newer, lower cost mills. And so, you know, we effectively achieved internal cost arbitrage by moving that production and keeping our shipping pace where it was but with an overall lower cost platform. So, you know, those are the things I would say that we're laser focused on doing every day.
Chris: Replace that volume at our other newer lower cost mills, and so we had effectively internal cost arbitrage.
By moving that production in and keeping our shipping pace, where it was but with an overall lower cost platform. So.
Chris: Those are the things I would say that we're laser focused on doing every day, we spent a lot of capital in the last in the last several years and continue on our capital program and I think that's one of our Differentiators is we're spending the capital and trying to improve the.
Christopher A. Virostek: We've spent a lot of capital in the last several years and will continue to do so, and I think that's one of our differentiators is that we're spending capital and trying to improve the quality of the assets and the businesses and how they run even through the bottom of the cycle. So we're going to keep pushing on that cost lever, as much as we can, to keep driving costs down across the platform in lumber and, in fact, in all the businesses. And we saw some great results on that in the first quarter, and certainly, you know, the teams are working on that every day.
Chris: Quality of the assets in the businesses and how they run that even through the bottom of the cycle. So we're going to keep pushing on that cost lever.
Chris: As much as we can to keep driving costs down across the platform in lumber and in fact in all the businesses and we saw some some great. Some great results on that in the first quarter and certainly the teams are working on that every day.
Okay. Thanks for that Chris I appreciate it guys.
Thank you ladies and gentlemen, just a reminder, so do you have a question. Please press star followed by the number one on your Touchstone styling. We have our next question coming from the line of Matthew <unk> from RBC capital markets go ahead.
Matthew: Hi, good morning, and thanks for taking my questions.
Matthew: First I'd like to ask I think you've talked about having a few more organic projects in the queue for U S lumber platform.
Christopher A. Virostek: Okay, thanks for that, Chris. I appreciate it, guys.
Operator: Thank you, ladies and gentlemen. Just a reminder, should you have a question, please press star followed by the number 1 on your touchstone phone. We have our next question coming from the line of Matthew McKellar from RBC Capital Markets. Go ahead.
Matthew: Is the softness you're seeing in southern yellow pine today, changing your view at all on whether those projects pencil out over the longer term or potentially changing the timing of when you did move forward with some of those new investments in the USF.
Speaker Change: Good morning, Matthew Sean here.
Sean P. McLaren: I think when we refer to that its projects, we have in motion and of which the largest is our Henderson project and that won that project, we're not slowing down there it's on schedule.
Matthew Mckellar: Hi, good morning. Thanks for taking my questions. First, I'd like to ask you about having a few more organic projects in the queue for your U.S. lumber platform. Is the softness we're seeing in Southern Yellow Pine today changing your view at all on whether those projects pencil out over the longer term or potentially changing the timing of when you may move forward with some of those new investments in the U.S. south?
Sean P. McLaren: On budget. It is a strategic investment that we think will be well positioned whatever the market cycle is once we get it up to rate and integrated in our full east Texas platform.
Sean P. McLaren: I think for for future projects.
Sean P. McLaren: Good morning, Matthew. Sean here.
Sean P. McLaren: You know, I think when we refer to that, it's projects we have in motion, and the largest is our Henderson project, and that one, that project; we're not slowing down there. It's on schedule, on budget. It is a strategic investment that we think will be well positioned, whatever the market cycle is once we get it up to rate and integrated into our full East Texas platform. I think for future projects, we are very focused on, you know, ramping up what we have in motion, executing on the capital we've spent, and finishing the capital we have underway.
Sean P. McLaren: We are very focused on.
Sean P. McLaren: Ramping up what we have in motion and executing on the capital we've spent and finishing the capital we have underway. So we're even though we are doing planning for the future I think new projects, we're going to pick our time when we do that focused job one today in west Fraser is delivering on what we have projects.
Sean P. McLaren: We already have in motion and in startup.
Speaker Change: Alright, thanks very much for that.
Speaker Change: The next question you've been pretty clear on outlining what factors you consider when pursuing M&A.
Speaker Change: And with that as a background can you describe what the pipeline of opportunities you're seeing in the market it looks like today.
Sean P. McLaren: So even though we are doing planning for the future, I think new projects we're going to pick our time. When we do that, focus, job one today in West Fraser is delivering on what we have, projects we already have in motion and in startup.
Speaker Change: Maybe I'll make a comment or two and ask Chris to just weigh in here, but I would say.
Speaker Change:
Speaker Change: Our view on West Fraser and is and has been.
Speaker Change: For an M&A opportunity it needs to be high quality immediately make a stronger support our existing business it needs to tick all the boxes.
Sean P. McLaren: Great, thanks very much for that. Next question, you've been pretty clear about outlining what factors you consider when pursuing M&A. And with that as a background, can you describe what the pipeline of opportunities you're seeing in the market looks like today? You know, maybe I'll make a comment or two.
Chris: Like Angelina did like Allendale did like spray lakes or Cochran did I would say those opportunities are pretty few and far between today.
Chris: And people with high quality assets.
Sean P. McLaren: Maybe I'll make a comment or two and ask Chris to just weigh in here. But I would say our view at West Fraser is and has been, for an M&A opportunity, it needs to be high quality, immediately make us stronger, and support our existing business. It needs to tick all of the boxes, you know, like Angelina did, like Allendale did, like Spray Lakes or Cochrane did. I would say those opportunities are pretty few and far between today, you know, and people with high-quality assets, the odd one might come to market, but it's tough to find them. So that would be my perspective. And who knows, but I think we're well positioned to react to anything that we're interested in that comes on the market. But the bar is pretty high in West Fraser.
Chris: The odd one might come to market, but but tough to find them. So so that would be my perspective, and who knows but I think we're well positioned to to react to anything that we're interested in that comes on the market, but the bar is pretty high and west Fraser.
Chris: Yeah.
Chris: Yes.
Speaker Change: Great. Thanks very much.
Speaker Change: Last kind of cleanup for me.
Speaker Change: On hits and I know you have a long term contracted 90 to the supply residuals into that facility.
Speaker Change: My question is whether you expect any significant downside of that battle between now and 2027 as they work through their paper machine investments.
Speaker Change: Maybe you have to find a home for those residuals on an interim basis.
Speaker Change: So how should we think about the financial significance of that.
Speaker Change:
Speaker Change: Thank you.
Speaker Change: What how they're going to execute their capital is really a question for them, but we feel very good about our ability to dispose of our residuals in Alberta.
Sean P. McLaren: Great, thanks very much. There is one last kind of cleanup for me.
Sean P. McLaren: On Hinton, I know you have a long-term contract with Monty to supply residuals into that facility. My question is whether you expect any significant downside from that mill between now and 2027 as they work through their paper machine investments. It would mean you have to find a home for those residuals on an interim basis. And if so, how should we think about the financial significance?
Speaker Change: That's a low cost region for us that we want to that we wanted to make sure operates.
Speaker Change: And we think we've definitely taken all the right steps with that transaction to provide us the comfort that we can continue to do that over over a very long extended period of time.
Speaker Change: Yeah.
Sean P. McLaren: I, you know, I think. How they're going to execute their capital is really a question for them, but we feel very good about our ability to dispose of our residuals in Alberta. You know, that's a low cost region for us that we want to make sure operates, and, you know, we think we've definitely taken all the right steps with that transaction to provide us with the comfort that we can continue to do that over a very long, extended period of time.
Speaker Change: Great. Thanks, a lot for the color I'll turn it back.
Speaker Change: Q.
Speaker Change: Yeah.
Speaker Change: You have a follow up question coming from the line of Sean Stewart from TD Cowen go ahead. Please.
Sean Steuart: Thanks, just one follow up guys OSB in North America.
Sean Steuart: It looks like prices are starting to crack after a really surprising run over the last several months.
Sean Steuart: Can I get your perspective on on downside risk to that market.
Sean Steuart: How far do you expect prices could fall before downtime kicks in and I appreciate youre, taking a slow and steady approach with allendale, but.
Sean P. McLaren: Great. Thanks a lot for the color. I'll turn it back.
Operator: We have a follow-up question coming from the line of Sean Steuart from TD Kallen. Go ahead, please.
Sean Steuart: Broader thoughts on managing supply.
Sean Steuart: As prices potentially correct here over the next little bit.
Sean Steuart: Thanks. Just one follow up, guys.
Speaker Change: I'll make maybe a comment or two here Shawn and then getting that to fill in here.
Sean Steuart: OSB in North America. It looks like prices are starting to crack after a really surprising run over the last several months. Can I get your perspective on the downside risk to that market? How far do you expect prices could fall before downtime kicks in? And, you know, I appreciate you taking a slow and steady approach with Allendale. But, broader thoughts on managing supply as this price is potentially correct here over the next little while.
Shawn: I guess from my perspective, our OSB sales team and entire team has done a very good job I think we've strengthened relationships with key customers built programs.
Shawn: Both are supported by OSB lumber and lumber and I think that's given us an ability to ramp up allendale into those programs in terms of what it's going to happen really tough for us to we know supplies coming on.
Sean P. McLaren: You know, I'll make maybe a comment or two here, Sean, and then get Matt to fill in here. You know, from my perspective, our OSB sales team and the entire team has done a very good job. I think we've strengthened relationships with key customers, built programs that are both supported by OSB and lumber, and I think that's given us an ability to ramp up Allendale into those programs. In terms of what is going to happen, it is really tough for us.
Shawn: Saying that.
Shawn: The business has consistently held up.
Shawn: Better than our expectations, which we've been pleased by and and our team has done an excellent job of strengthening relationships with our key customers for both products.
Matt anything to.
Shawn: Perfect.
Matt Tobin: We were really focused on supporting our key customers to meet their demand and.
Matt Tobin: Supply them through all markets.
Matt Tobin: Okay.
Speaker Change: That's it for me thanks, guys.
Speaker Change: Okay.
Speaker Change: We have a follow up question coming from the line of Steven Mento, RF Ambien for capital Michael Go ahead.
Steven Mento: Thanks for taking my follow up question.
Sean P. McLaren: We know supplies are coming on, but saying that the business has consistently held up better than our expectations, which we've been pleased by. And our team's done an excellent job of strengthening relationships with our key customers for both products.
Steven Mento: As shown on kind of what you are seeing in Europe in terms of activity level, and you'll see sort of being kind of.
Steven Mento: Activity under pressure are you seeing things stabilize.
Steven Mento: Yes, Hi, I Keaton.
Michael: Europe is is slow has been slow for a number of quarters now what I would say as we come into Q2 is that we've seen even though prices really haven't materially improved we have seen some volume improvement rate inflation seems to be coming down.
Matt Tobin: Matt Anything to That's perfect, you know; we're really focused on supporting our key customers to meet their demand and supply them in all markets.
Matt Tobin: Okay, that's it for me. Thanks, guys.
Operator: We have a follow-up question coming from the line of Ketan Mamtora from BMO Capital Markets.
Michael: On a little quicker over there.
Ketan Mamtora: Thanks for taking my follow-up question. Question on what you're seeing in Europe in terms of activity levels: are you still seeing some kind of activity under pressure, or are you seeing things stabilized?
Michael: Saying that.
Michael: Still it's still really slow in Europe, we have we have really good assets a strong team.
Michael: We'll see when things improve but we're pretty we feel pretty good about our.
Sean P. McLaren: Yeah, hi, Ketan. You know, Europe is, it's slow, has been slow for a number of quarters now. What I would say as we come into Q2, is that even though prices really haven't materially improved, we have seen some volume improvement, and rate inflation seems to be coming down a little quicker over there, although still really slow in Europe. We have, we have really good assets, a strong team, you know. We'll see when things improve, but we feel pretty good about operating even in this environment and keeping, you know, moving all of our operational excellence and business goals forward, even though pricing is tough.
Michael: About operating even in this environment and keeping.
Michael: Moving.
Michael: All of our operational excellence and business goals forward, even though pricing is tough.
Michael: Yeah.
Speaker Change: Got it and then just one related question to that if Europe remains weak and it sounds like it is fairly b what are the risks that we.
Speaker Change: We start to see.
Speaker Change: An uptick again in imports of lumber into the U S from Europe, I mean, it's been coming down.
In the last little bit.
But just curious how youll see that.
Speaker Change: Potentially shaping out and as we move through Q2 and into Q3.
Speaker Change: You know again, we don't have we don't have lumber assets in Europe. So our visibility as you know is not as good as maybe some others, but I guess our view is that you know.
Sean P. McLaren: Got it. And then just one related question to that: if Europe remains weak, and it sounds like it is fairly weak, what is the risk that, you know, we start to see an uptick again in imports of lumber into the US from Europe? I mean, it's been coming down here in the last little bit. But just curious how you see that potentially shaping out as we move through Q2 and into Q3.
Speaker Change: There's been a lot of investment by European producers opening up those supply chains there.
Speaker Change: We're unlikely to let those supply chains close so we likely will continue to see volume flowing saying that.
Speaker Change: You know as things improve in other markets that they normally go through we'll see that volume go to those markets. So so we view it could be up and down but we view it long term likely volumes going to stay in their more traditional markets.
Sean P. McLaren: You know, again, we don't have lumber assets in Europe. So our visibility is, you know, is not as good as maybe some others.
Speaker Change: Got it that's helpful.
Sean P. McLaren: But But I mean, I guess our view is that, you know, there's been a lot of investment by European producers opening up those supply chains, and they're unlikely to let those supply chains close. So we likely will continue to see volume flowing, saying that, you know, as things improve in other markets that they normally go to, we'll see that volume go to those markets. So, as we view it, it could be up and down, but we view it long term, with likely volumes going to stay more in their more traditional market.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Further question at this time I would now like to turn the call back over to Mr. Mcmurray for final closing comments.
Mcmurray: Thanks, Larry as always Chris and I are available to respond to further questions as is Robert Winslow, our director of Investor Relations and corporate development.
Mcmurray: You for your participation today stay well and we look forward to reporting on our progress next quarter. Thank you.
Speaker Change: Thank you, Sir ladies and gentlemen. This concludes your conference call for today, we thank you for participating and ask could you. Please disconnect your lines.
Sean P. McLaren: Got it. That's helpful. I'll turn it over. Thank you.
Sean P. McLaren: Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mr. McLaren for his final closing comments.
Okay.
Speaker Change: Okay.
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Operator: Thanks, Lara. As always, Chris and I are available to respond to further questions, as is Robert Winslow, our Director of Investor Relations and Corporate Development. Thank you for your participation today. Stay well, and we look forward to reporting on our progress next quarter. Thank you. Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day!
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Operator: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.
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