Q3 2025 Louisiana-Pacific Corp Earnings Call

In a listen only mode. After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone and you will then hear an automated message advising that your hand is raised to withdraw your question. Please press star one again please.

Jason Ringblum: I would say, Kate, 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 and remodel markets. 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 ExpertFinish, 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, what I would say is, yes, business has normalized in that segment, but we were up year over year. 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.

Please be advised that today's conference is being recorded.

I would now like to hand, the conference over to your first speaker today, Aaron whole world.

Speaker #2: Good day and thank you for standing by . Welcome to the third quarter 2025 Louisiana-Pacific Corporation Earnings Conference Call . At this time , all participants are in a listen only mode .

Please go ahead.

Thank you operator, and good morning, everyone. Thank you for joining us to discuss Lp's results for the third quarter of 2025 as well as our updated outlook for the full year on the call. This morning are Brad Southern Alan Hockey and Jason Lindbloom, who are Lp's, Chief Executive Officer, Chief Financial Officer, and President respectively. As always after prepared remarks, we will.

Speaker #2: After the speakers presentation , there will be a question and answer session . To ask a question during the session , you will need to press star one one on your telephone and you will then hear an automated message advising that your hand is raised .

Around a questions. During this morning's call we will refer to a presentation that has been posted to Lp's IR webpage, which is investor Dot <unk> Dot com, our 8-K filing earnings press release and other materials are also available there.

Speaker #2: To withdraw your question , please press star one one again . Please be advised that today's conference is being recorded . I would now like to hand the conference over to your first speaker today , Aaron Howald .

Speaker #2: Please go ahead .

Speaker #3: Thank you . Operator . And good morning , everyone . Thank you for joining us to discuss LP's results for the third quarter of 2025 , as well as our updated outlook for the full year .

Finally, I will caution you that today's discussion contains forward looking statements and non-GAAP financial metrics as described on slides two and three of Lp's earnings presentation. The appendix of the presentation. Also contains reconciliations that are further supplemented by this morning's 8-K filing rather than reading those materials I will incorporate them herein by reference.

Jason Ringblum: Really, where the softness resides is more in the new construction segment, particularly in the southern markets. We see a little bit more resilience in repair remodel, especially in the northern markets where we have a more dominant share position.

Speaker #3: On the call this morning are Brad Southern , Allen and Jason Ringelblume , who are LP's chief executive Officer , Chief Financial Officer and president , respectively .

Speaker #3: As always , after prepared remarks , we will take a round of questions during this morning's call . We will refer to a presentation that has been posted to LP's IR webpage , which is investor .

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

Brad Southern: Jason, I'll just add to that. Sorry, Kate. 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. That kind of backs off as we get through the summer. I think what we saw seasonally in shed is pretty consistent with the historic trends that have driven our order file in the past.

Thanks, Sarah and good morning, everyone. Thank you for joining us as usual I will discuss some highlights from the quarter before Alan shares more detail about our results and updated guidance.

Speaker #3: Comm . Our 8-K filing earnings press release and other materials are also available . There . Finally , I will caution you that today's discussion contains forward looking statements and non-GAAP financial metrics as described on slides two and three of LP's earnings presentation .

After that Jason Alan and I will be happy to take your questions.

As expect 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.

Speaker #3: The appendix of the presentation also contains reconciliations that are further supplemented by this morning's 8-K filing . Rather than reading those materials , I will incorporate them herein by reference .

Ketan Mamtora: Got it. No, that's helpful. Just one more question. It seems like 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 sell it kind of more as a bundle. Can you talk to sort of what is driving that move and what kind of reception you're getting with your customers?

5% growth in siding sales revenue, driven primarily by price and a strong mix exceeded our expectations and guidance.

Speaker #3: And with that , I will turn the call over to Brad . Thanks , Erin . Good morning everyone . Thank you for joining us .

While we anticipated the normalization of demand in the share component of our siding business. Our export finished prefinished siding product, primarily designed for R&R applications salt sales volumes increased by 17% year over year.

Speaker #3: 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 .

Speaker #3: As expected , cited 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 .

The April launch of our expert finished naturals collection, which is a new line of nature inspire two tone colors has contributed materially to our beneficial price mix effect.

Jason Ringblum: Yeah. I'll take that one, Kate. Appreciate the question. Back in April, we announced the integration of our OSB and siding businesses. Really, the main reason for that was to better leverage our resources and better leverage the breadth of our product portfolio in the marketplace. 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. 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.

Speaker #3: 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 finished Prefinished siding product primarily designed for R&R applications , saw sales volumes increase by 17% year over year .

<unk> finished accounted for 10% of overall siding volume and 17% of overall siding revenue in the quarter showing once again, the power of smart side innovation to drop price volume growth and share gains.

Inventory levels and sell through rates held steady through the quarter consistent with servicing seasonally normal demand levels. The only exceptions expert finish which remains in such high demand that we have implemented managed order file until new capacity comes online early next year.

Speaker #3: The April launch of our Expert Finish Naturals Collection , which is a new line of nature inspired two tone colors , has contributed materially to a beneficial price mix effect .

Total sales in the quarter were down 8% compared to prior year and EBITDA of $82 million was also down significantly.

Speaker #3: 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 side innovation to drive price volume , growth and share gains .

Standard trough in OSB prices was the main drag on both metrics.

While we obviously cannot control OSB prices, we can manage the OSB business effectively and our teams did that exceptionally well in the face of what remains a difficult market.

Speaker #3: Inventory levels and sell through rates held steady through the quarter , consistent with servicing seasonally . Normal demand levels . The only exception is Expert Finish , which remains in such high demand that we have implemented managed Order file until new capacity comes online early next year .

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

Jason Ringblum: Thank you.

Brad Southern: Thank you.

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

The OSP business achieved 80% overall equipment effectiveness or OE in the quarter up two points from last year.

Sean Steuart: Thanks. Good morning, everyone. I'll extend my congratulations to both Brad and Jason as well. I want to 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? Attached to that question, does the Section 232 determination, which exempts OSB and siding from Canada, factor into the decision at all? I guess broader perspectives, the determination on Section 232 sort of left it open-ended that the administration can consider changes to the assessment as time unfolds. I guess the short question is, are you comfortable that this will be an extended or a permanent exemption for OSB and siding from Canada? I'll leave it there.

Creasing OE is never easy and it can be particularly challenging when we are also managing our capacity with discipline to balance supply and demand.

Speaker #3: 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.

I want to congratulate and thank everyone on the OSB operations team, who contributed to this impressive achievement.

Speaker #3: While we obviously cannot control OSB prices , 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 OE , in the quarter , up two points from last year , increasing OE is never easy and it can be particularly challenging when we are also managing our capacity with discipline to balance supply and demand .

Our results are only possible because of our teams and the strong culture, we have built.

In the third quarter LP 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 admire workplaces.

Finally, as you saw I informed Lp's board of directors 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 <unk> 4300 person team.

Speaker #3: 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, LP was named one of the 50 Best Manufacturers in the United States by Industry Week, debuting on the list at number 24.

Ultimately the job of the CEO is to build an engaged culture focused on safety growth innovation and execution to deliver value long after he or she is going.

Brad Southern: 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. 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.

Speaker #3: 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 .

When we launched Lp's transformation strategy I was daunted about the challenges, we face and the aggressive goals, we've set for value creation I.

I am proud to say that we exceeded those goals as.

Speaker #3: Finally , as you saw , I informed LP's board of directors of my intention to retire . This coming February . After more than 25 years of service .

As Lp'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.

Speaker #3: It has been the honor of my career to lead LP's 4300 person team . Ultimately , the job of a CEO is to build and engage culture focused on safety , growth , innovation and execution to deliver value long after he or she is gone .

Jason ranked bloom and I have been friends and colleagues for over 20 years. He was instrumental in the development and execution of LP strategic transformation. He led Lp's OSB in AWP businesses for five years and for the last three led LP siding business before being named President.

Speaker #3: When we launched LP's transformation strategy , I was daunted by the challenges we faced and the aggressive goals we set for value creation .

Brad Southern: 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 that would be a potential benefit, but it's not a reason right now for the.

This perspective makes him uniquely suited to serve as Lp's next CEO I have total confidence that with Jason Lp's future has never been brighter.

Speaker #3: I am proud to say that we exceeded those goals as LP'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 .

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

Thanks, Brad before discussing the results I do want to take a moment to say that looking for Brad has been a personal and professional highlights for me and.

Sean Steuart: Exactly.

Brad Southern: Yeah. The 232 issue is not the decision maker. It is noise that currently is a net benefit. The long-term reasons for Manawaki, should we make that decision, would be the fundamental market dynamics and the efficiencies that that mill would bring. Sean, the process, as you can tell, as we've gone, 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. It is certainly dynamic. The evaluation that we do is financially driven, long-term financially driven, as Aaron said. There are components, specifically to tariffs. 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 ExpertFinish growth.

Speaker #3: Jason and I have been friends and colleagues for over 20 years . He was instrumental in the development and execution of LP strategic transformation .

And while they may be tough shoes to fill I can think of no one better suited for this task and Jason.

Speaker #3: He led LP's , OSB and AWP businesses for five years , and for the last three led LP , citing business before being named president .

And with that slide seven of the presentation show sightings results for the quarter.

As expected the bulk of growth came from price.

Speaker #3: This perspective makes him uniquely suited to serve as LP's next CEO. I have total confidence that, with Jason, LP's future has never been brighter.

Average selling prices were up 5% with triad products of 3% and expert finished prices up 12%.

And there were two mixed phenomena, helping this alone first as Brad mentioned shed segment volumes normalized after a very strong first half and as I'm sure. You'll recall strong shed volumes had 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 shared relative to primed and X.

Speaker #3: And with that , I will turn the call over to Alan . Thanks , Brad . Before discussing .

Speaker #4: 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 and while they may be tough shoes to fill , I can think of no one better suited for this task than Jason .

Speaker #4: And with that . Slide seven of the presentation shows sidings results for the quarter . As expected , the bulk of growth came from price .

<unk> finished products.

The other mix factor within expert finish itself, where demand for Lp's tutto naturals and other higher priced pre finished products drove outsized year over year price gains. This mix shift is also evident in the year via volume column, which shows relatively flat volumes in total, but within which prime volumes were down 1% and expert.

Speaker #4: Average selling prices were up 5% with primed products up 3% . And expert finished prices up 12% . And there were two mixed phenomena helping this along .

Brad Southern: 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. When we get ready to present to our board, that's when the rubber hits the road around crystallizing around one facility and being able to explain from a return standpoint why that one was chosen. More to come on that, but we did think it was worth mentioning Manawaki as a prime candidate, or perhaps the prime candidate right now, given that we haven't talked about that much in the past.

Speaker #4: First , as Brad mentioned , shed segment volumes , normalized after a very strong first half . And as I'm sure you'll recall , strong shed volumes had been a drag on prices earlier in the year .

Finished volumes were up 17%.

Selling and marketing investments raw material inflation and other factors with fairly typical but there are some moving pieces in the other column that bear mentioning.

Speaker #4: 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.

You may recall that the third quarter of last year. So an unusually high EBITDA margin in part because of delays in maintenance projects and the resulting inventory build impacts.

Speaker #4: The other mix factor was within expert finish itself , where demand for LPs , two toned naturals and other higher priced Pre-finished products drove outsized year over year price gains .

Impacts, which then reversed in the following quarter. So much of what you see in the $20 million of other costs. In this waterfall is the non recurrence of those events from last year.

Speaker #4: 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% .

Sean Steuart: Understood. Maybe just one follow-up there, Brad. Part of this reordering of the options is the extent to which OSB markets have unraveled here the last several months. I mean, you position 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? You're considering Manawaki in that context as well. This could be a longer trough than we're accustomed to seeing for OSB.

All of them.

Inventory absorption as actually a double hit I E. We built inventory in the third quarter of last year, which boosted EBITDA, whereas this year, we have reduced inventory, which temporarily hurts EBITDA, but.

Speaker #4: Selling and marketing investments . Raw material inflation and other factors were fairly typical , but there are some moving pieces in the other column that bear mentioning .

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.

Speaker #4: 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 .

The $2 million tax impact as the retaliatory tariffs LP had been paying to input expert finishing to kind of.

Those tariffs were ascended in late August. So we are not currently incurring that expense.

Speaker #4: So much of what you see in the $20 million of other costs in this waterfall is the non-recurrence of those events from last year .

So as I'm sure you're aware the section 232 tariff announcements did not impact lp's OSB or siding manufacturing in Canada and imported into the U S. So it wasn't in Minot tariff impacts on some of our raw materials <unk> currently been minimal tariff costs.

Speaker #4: 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 , which temporarily hurts EBITDA .

Brad Southern: No, we were not intending to signal that at all. Certainly, 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. 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, if we're not in as much of a hurry as we thought we were six months ago, what are other options? That's really when we started focusing in on Manawaki. It was not OSB related that.

Speaker #4: 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 OSB chart on slide eight tells us simply if bleak story of soft OSB prices and a challenging demand environment.

OSB prices spent most of the quarter barely above variable cost driven by sluggish demand, particularly in the southeast.

Speaker #4: The $2 million tariff impact is from the retaliatory tariffs LP had been paying to import finished goods into Canada. Those tariffs were rescinded in late August, so we are not currently incurring that expense.

Price realizations fared somewhat better than expected due to a combination of the lagging contractual prices and structural solutions mix.

Speaker #4: Also , as I'm sure you're aware , the section 232 tariff announcements did not impact LP's OSB or siding manufactured in Canada and imported into the US .

While the small non price variances musket volatile well.

The OSB operations team played to Henry with Delta exceptionally well overall efficiency hit 80% up two points from last year and aggressive cost control helped to the OSB segment outperformed our algorithmic guidance.

Speaker #4: So other than minor tariff impacts on some of our raw materials , LP is currently bearing minimal tariff costs . The OSB chart on slide eight tells us .

Speaker #4: Simple , if bleak , story of soft OSB prices and a challenging demand environment . OSB prices spent most of the quarter barely above variable cost , driven by sluggish demand , particularly in the southeast .

Now superficially. This waterfall suggests that price is the only thing that matters in MSP.

Perhaps a more accurate reading is that at prices. This low everything matters. So I tip my hat to the OSB team for making the best of a very difficult market.

Speaker #4: Price realization fared somewhat better than expected due to a combination of the lag in contractual prices and structural solutions . Mix . And while the small non-price variance is make it rather well , the OSB operations team played the hand they were dealt exceptionally well .

Slide nine shows cash flow for the quarter, which while straightforward very much continues to reinforce the value of Lp's transformation.

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

$2 million of EBITDA translated to <unk> $9 million of operating cash flow after minor puts and takes for working capital taxes and interest.

Speaker #4: Overall efficiency hit 80%, up two points from last year, and aggressive cost control helped the OSB segment outperform our algorithmic guidance.

We invested $84 million in Capex to support growth of expert finished structural solutions as well as to ensure that our plants continue to operate safely and efficiency.

Speaker #4: Now, superficially, this waterfall suggests that price is the only thing that matters in OSB, and perhaps a more accurate reading is that it prices this low.

After $19 million in dividends, we ended the quarter with $316 million in cash and over $1 billion of liquidity, including our Undrawn credit facility.

Speaker #4: Everything matters . So 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 LP's transformation .

Which brings us to guidance on slide 10.

Sean Steuart: I can hear you. Can you hear them? I cannot. No.

Regrettably OSB prices have scarcely moves since the last call. So our fourth quarter OSB guidance is only slightly improved the.

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

Speaker #4: $82 million of EBITDA translated to $89 million of operating cash flow after minor puts and takes for working capital taxes and interest . We invested $84 million in CapEx to support growth of expert finish and structural solutions , as well as to ensure that our plants continue to operate safely and efficiency .

The beneficial lag factors that helped the third quarter have dissipated given how loan 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 I was always algorithmic projections of current prices and utilization.

Speaker #4: And after $19 million in dividends , we ended the quarter with $316 million in cash and over $1 billion of liquidity , including our undrawn credit facility .

For siding, we reaffirm our full year EBITDA guidance of $430 million.

Speaker #4: Which brings us to guidance on slide ten . Regrettably , OSB prices have scarcely moved since the last call . So our fourth quarter OSB guidance has only slightly improved .

However for the fourth quarter. The market has continued to weaken so we anticipate slightly softer growth, we still expect the year over year revenue increase in the coming quarter, but if about 3% and this mostly from price.

Brad Southern: Joe, can you hear us now?

Operator: Yes, we can. Great. We can hear you. Sean, you're still there?

Speaker #4: The beneficial lag 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 .

Sean Steuart: I am. I'm all good, guys. You can go on to the next.

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.

Brad Southern: There you go. Sean, did you hear it? I mean, that was such a great—it's probably the best answer of my CEO career, and I got cut off in the middle of it.

Speaker #4: The resulting $45 million of EBITDA loss in the fourth quarter and break even for the year are , as always , algorithmic projections of current prices and utilization for siding .

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

Brad Southern: Thanks, Sean.

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

Speaker #4: 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 .

<unk> <unk> six 8 billion, while increasing our full year EBITDA margin guide to about 26%.

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.

Aaron Howald: I don't know, Brad. I don't know who should ask any more questions after that. High note. Congrats to all, of course. Maybe just a little bit more on the thinking on the Manawaki, Holton. I mean, your volumes this year aren't that different from what you were expecting. I mean, it seems to suggest that you're taking a little bit more of a cautious perspective on next year. Obviously, it's pretty early. Maybe help us think that through a little bit. When you say several quarters, does that mean you're kind of thinking it's like you don't need it for close to a year later than what you would have initially anticipated wanting the volume up?

Speaker #4: We still expect a year over year revenue increase in the coming quarter , but of about 3% . And this mostly from price .

Speaker #4: 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 EBITDA of about $82 million.

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.

Speaker #4: 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% .

But we're also cutting our capex guidance and 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 and.

Speaker #4: 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 .

And OSB and siding, we're balancing steadily improving OE and initiatives to optimize lp's entire manufacturing portfolio against the backdrop of persistent market softness as a result, the sense of urgency that motivated holton expansion is the fastest route to additional capacity is now somewhat diminished and this makes our.

Speaker #4: 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 OSB .

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

Speaker #4: 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 .

OSB mill in Milwaukee, Quebec, a viable candidate for conversion to siding on 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.

Speaker #4: But we're also cutting our CapEx guidance , and 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 and siding .

Speaker #4: We're balancing steadily improving OE and initiatives to optimize LP's entire manufacturing portfolio against a backdrop of persistent market softness . As a result , the sense of urgency that motivated Halton's expansion as the fastest route to additional capacity is now somewhat diminished , and this makes our OSB mill and Maniwaki Quebec a viable candidate for conversion to siding an option .

So while we why these options we have paused any further mill specific spending while continuing the longer lead time metal agnostic investments and with that we'll be happy to take your questions.

Okay.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.

Speaker #4: 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 .

Brad Southern: I do feel like the—I mean, I know that the reason we were able to take a breath on expediting a mill conversion is Holton, as we just looked at the housing forecast that folks are putting out there. As we aligned with that, we felt like we had another year of time to make a conversion versus being very rushed. Rushed caused us to go to Holton because it would be the quickest, but also rushed would have significantly increased the capital expense too. I think we're in a good place to where we still have 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.

Speaker #4: And with greater capital efficiency . So while we weigh these options , we are paused any further . Mill specific spending while continuing the longer lead time mill agnostic investments .

Our first question comes from the line of George Staphos with Bank of America Securities Go ahead. Your line is open.

Thanks, So much I appreciate all the details everyone.

Speaker #4: And with that, we'll be happy to take your questions.

I know, everyone said, congratulations Brad and Jason on the news and we wish you continued.

Speaker #2: 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 star one one on your telephone and wait for your name to be announced .

Progress and success in the next chapters.

The first question I had Alan if you could just give us a bit more detail in terms of.

Speaker #2: To withdraw your question , please press star one one again . Please stand by while we compile the Q&A roster . Our first question comes from the line of George Staphos with Bank of America Securities .

The potential shift from Holton to mono walkie, what's behind it how will we ultimately see it one manifests itself versus the other in terms of operations and performance.

And the second question I had.

Speaker #2: Go ahead . Your line is open .

Maybe more.

Speaker #5: Thanks so much . I appreciate all the details . Everyone . And you know , I know everyone will say congratulations , Brad and Jason on on the news .

Jason and Brad.

There's obviously been some headlines in the last couple of days about.

Speaker #5: 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 Houlton to Maniwaki , what's behind it ?

Aaron Howald: Super. Maybe could you expand a little bit on that in terms of capital efficiency, recognizing you're still in the evaluation stage? Order of magnitude, how much capital might be required for a Manawaki conversion? Also, does this mean that your CapEx spend in 2026 is actually going to be more reduced than maybe what some of us would have been thinking previously?

Last couple of weeks about marketing battles some of your peers.

Lending 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.

Change the way you market or does that actually help you because your peers might have some other things that they are focused on relative to the siding business, thanks, and I'll turn it over there.

Speaker #5: 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 maybe more for , for for Jason and Brad .

Thank you.

George Thanks for the questions before I will address that too.

Speaker #5: You know , there have obviously been some headlines in the last couple of days about in the last couple of weeks about marketing battles .

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 <unk> on the full year EBITDA guide.

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

Speaker #5: Some of your your peers extending relationships with some of the building products distributors to push product that maybe is a more competitive backdrop .

In the fourth quarter the difference between <unk> corporate unallocated expenses is indeed $5 million.

For the full year as Youll note from the published materials that went out. This morning, the difference isn't 5 million, but it's $10 million. So just to be clear the full year EBITDA is expected to be $420 million.

Aaron Howald: Fair enough.

Brad Southern: Great questions. Sorry, we're just not in a position to answer.

Speaker #5: 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?

Aaron Howald: Understood. Just last, if I could. With the sheds business, obviously, it had been quite weak last year, much stronger this year. Can 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? I mean, did we have some catch-up this year so that there is downside risk to next year in a normal environment? Is it more that it was just so bad last year, this really strong growth just got us back up to what you consider to be kind of a typical year?

So excuse me, so about $10 million lower than the sum of siding and OSB as breakeven, but still an increase.

Speaker #5: Thanks . And I'll turn it over there .

Speaker #4: Thank you . George , thanks for the questions . Before I we will address your two questions . But 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 .

On the previous previous guidance. So we've got a program I thought hold on.

And now I am going to turn over the question on many walkie to my friend and colleague Jason.

Yes, Thanks for the question George I'll touch a little bit on.

Speaker #4: 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 .

No conversion options I guess, when you think about it holistically the beauty of our position here at LP is that we have multiple options.

And I'll go through those just quickly we've mentioned on previous calls.

Speaker #4: 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 siding and OCP break even , but still an increase on the previous guidance .

We have the opportunity to it.

Expand existing siding plant, so imaging imagine aligned parallel to an existing line.

Brad Southern: Yeah, I'll take that one. What I'd say is there was a fair amount of pull-forward demand in shed during COVID. Our business was very strong those years. To some extent, 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 a couple of points relative to kind of a normal rate. We feel good about that business, and it's been very consistent for us through the years. I feel good about opportunities we have to improve our share position there as well.

Speaker #4: So I've got a frog in my throat . Hold on . And now I'm going to turn over the question on Maniwaki to my friend and colleague Jason .

Current siding plant.

Also have the opportunity to convert additional OSB facilities, an Aspen wood basket, So manoel walkie as Alan mentioned as an option along with Peace Valley and then also the potential for a greenfield that would leverage side.

Speaker #6: Yeah , thanks for the question , George . I'll touch a little bit on mill conversion options , I guess when you think about it holistically , the beauty of our position here at LP is that we have multiple options , and I'll go through those just quickly .

Sites that we own today, and Wawa, Ontario, our Cook, Minnesota.

Speaker #6: We've mentioned them on previous calls , but you know , we have the opportunity to expand existing siding plants . So you know , imagine imagine a line parallel to an existing line at a current siding plant .

With that said what I would say is the decision on the next Mel 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.

Speaker #6: Also have the opportunity to convert additional OSB facilities , and Aspen would baskets . So maniwaki , as Alan mentioned , is an option along with Peace Valley .

As Allen stated Milwaukee has.

Speaker #6: And then also the potential for a greenfield that would leverage sites that we own today, in Wawa, Ontario, or Cook, Minnesota.

Surface to the top here more recently, just given the OSB market.

Okay.

Aaron Howald: Thanks so much. Congrats both again.

And then the second part of your question just around the competitive dynamics.

Brad Southern: Thank you. Thanks, Mark.

Speaker #6: Now , with that said , what I would say is the decision on the next mill will really come down to timing and capital efficiency .

Operator: One moment for our next question. The next question comes from the line of Kurt Yinger with DA Davidson. Go ahead, your line's open.

What I would say is <unk>.

Generally we have not seen a whole lot of disruption within the channel I mean, this is a time of year where.

Speaker #6: Really coupled with the network optimization benefits that any given option has , the potential to add . So , you know , we're still assessing all of those options that I mentioned .

Ketan Mamtora: 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. Can 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 perhaps managing inventory levels and the price increase factored in, if at all?

New programs are being put in place, we're navigating rfps with <unk>.

Different customers, but.

Right now we're just we're focused on our strategy and really trying to minimize the noise and continue to focus on gaining share.

Speaker #6: But as as Alan stated , you know , Maniwaki has surfaced to the top here more more recently , just given the OSB market .

Hey, Jason just a quick one I'll turn it over aside from the fiber basket for mono walkie what else.

Speaker #6: And then the second part of your question , just around the competitive dynamics , what I would say is generally we have not seen a whole lot of disruption within the channel .

Makes it potentially rise to the surface.

More quickly.

Yes, so milwaukee as a large OSB facility. So it has got the ability to produce 600 to 650 million feet of OSB, which translates to call. It 400 million ish of siding.

Brad Southern: Yes. Thanks, Kurt. I guess I said this earlier, but I mean, the process is very consistent with what we've done in prior years. We look at historical purchases, kind of where demand is trending, and then come up with allocations for our distributor partners. We obviously work with them closely through that process. If they're communicating that they're going to short a customer on the other end, by no means will we hold them to that allocation specifically. 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, I think that's been well received. There are customers that are certainly asking for more, but that's something that we closely manage on a week-to-week basis.

Speaker #6: I mean , this is the time of year where , you know , new programs are being put in place . We're navigating RFPs with different customers , but right now we're just we're focused on our strategy and really trying to minimize the noise and continue to to focus on gaining share .

So just the scale and relative cost position of that facility.

Coupled with just the network optimization opportunities that it presents.

Speaker #5: Hey Jason , just a quick one . I'll turn it over . Aside from the fiber basket for for Maniwaki , what else makes it ?

We will all be factored into the analysis.

Speaker #5: Potentially rise to the surface more quickly?

Okay I see.

I'll, let me turn it over I'll come back thank you.

Speaker #6: Yeah . So Maniwaki is a large OSB facility , so it's got the ability to produce 600 to 650,000,000ft of OSB , which translates to , you know , call it 400 million ish of siding .

For the next caller.

The next call comes from the line of Susan Macquarie with Goldman Sachs. Go ahead. Your line is open.

Thank you and good morning, everyone.

And let me add my congrats to both Brian and Jason as well looking forward to working with you.

Speaker #6: So just the scale and relative cost position of that facility , coupled with just the the network optimization opportunities that it presents , will all be factored into the analysis .

Okay.

Yes.

The first question is talking about the pricing environment.

If traditionally announced an increase in or sometime in the fourth quarter. Our effective in early the following year just given the world that we're in and the varying dynamics around housing and the consumer how are you thinking about pricing as we look to 2020.

Ketan Mamtora: Okay. That's helpful. Just looking forward to 2026 a little bit, I mean, what areas of the siding 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? Separately, from a marketing or channel standpoint, kind of what are you most focused on there in terms of strengthening your position with different channel partners and whatnot? Thank you.

Speaker #5: Okay, I see. Let me turn it over. I'll come back. Thank you.

Speaker #2: Stand by for the next caller . The next call comes from the line of Susan McClary with Goldman Sachs . Go ahead . Your line is open .

Thanks for your question, Susan I'll take that one.

Speaker #7: Thank you . Good morning everyone , and let me add my congrats to both Brad and Jason as well . Looking forward to working with you , Susan .

So as of I guess within the last seven to 10 days, we did announce a price increase very consistent with what you've seen.

Speaker #7: Susan , my first my question is talking about the pricing environment and siding . You've traditionally announced an increase late in or sometime in the fourth quarter for effective in early the following year .

I should do in prior years.

Along with that we are.

Managing our order intake to really minimize any sort of inventory build in the channel in advance of our price increase so.

Speaker #7: Just given the world that we're in and the varying dynamics around housing and the consumer , how are you thinking about pricing as we look to 2026 ?

Brad Southern: Kurt, I'll take that one as well. What I would say is we've got very focused segment strategies for new construction, repair, remodel, and then offsite, which includes shed and manufactured housing segment. 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. We feel like there's an opportunity to continue to take a half point to a point of share of the addressable market on an annual basis as we think about the future.

Really those orders that are placed throughout December and our January order file I.

We will come at the new price lists so nothing unusual here.

Speaker #6: Thanks for your question , Susan . I'll take that one . So of I guess within the last 7 to 10 days , we did announce a price increase very consistent with what you've seen us do in prior years .

What I would say is increases Barry.

By product category and geography, but we are really targeting the net somewhere between 3% and 4% in 'twenty six.

Okay. Thank you and then Tony to OSB.

Speaker #6: Along with that, we are managing our order intake to really minimize any sort of inventory build in the channel in advance of our price increase.

Think about the environment that the builders are facing in 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 near term pressures that are there relative to the longer term outlook for Howard.

Speaker #6: So , you know , really those orders that are placed throughout December and in our January order file will come at the new price list .

Speaker #6: 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 and 4% and 26 .

And just adjusting the cost structure on a relative basis given those factors.

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

Yes, so demand for OSB has certainly been soft for the better part of the year end.

Speaker #7: Okay . 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 starts to end this year and then even into early 2026 .

As a result, our focus has really been on matching capacity to demand no different than what we've done.

Sean Steuart: Hey, guys. Thanks for taking my question. Just on ExpertFinish, can you kind of update us on where margins are there, especially with the managed order file currently?

Prior years, where we've experienced soft markets.

I would say today is our utilization rate for OSB is in the high <unk>, which is essentially.

Speaker #7: 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 ?

Brad Southern: Margins still have. They're good, but they still have a long way to go under these kind of circumstances. Again, I still see both. Outsized—we've certainly had outsized price increases on ExpertFinish, and we're making progress on the cost side. I think the future is bright for continued margin increase, but they're still lagging fundamentally, our primed offering. There's nothing but opportunity there.

Which essentially matches our committed volumes for the business. So what we felt as if we.

Sell open market wood or bring cash wood to the market.

Speaker #6: Yeah . So demand for OSB is certainly been soft for the better part of the year . And , you know , as a result , our focus has really been on matching capacity to demand .

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.

Speaker #6: No different than what we've done . In prior years . Where where we've experienced soft markets . What I would say today is our utilization rate for OSB is in the high 60s , which is essentially which essentially matches our committed volumes for the business .

Sean Steuart: Okay. Great. Thanks, guys.

Okay. Thank you for the color difficult quarter.

Thank you. Thank you.

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

One moment for our next question.

The next question comes from the line of Cotton Maturo with BMO capital markets. Please go ahead. Your line is open.

Speaker #6: So what we've felt is if we we sell open market , would or bring cash would to the market , largely , it ends up in in lower prices .

Brad Southern: Hi. This is Katherine Thompson and for Stephen today. Thank you for including me on the Q&A today. Answered many, many good questions, wanted to follow up just on a few on ExpertFinish. Had been taking some share gains. 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? 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?

Good morning, Thank you.

One for Greg.

Congratulations again.

I mean, it's been a remarkable transformation. This is a much different company today.

Speaker #6: So right now we're focused on really managing cost and optimizing our network relative to the demand . We see today .

It used to be <unk>.

The observation.

Thank you Kate.

Angela if we look forward to working with you.

Speaker #7: Okay . Thanks for the color . Good luck with the quarter .

Maybe to start with.

Speaker #4: Thank you . Thank you .

Can you talk a little bit about.

Speaker #2: One moment for our next question . The next question comes from the line of Ketan with BMO Capital Markets . Please go ahead .

Mentioned shed some volumes.

Normalizing in Q3 can you talk about what you saw there in Q T and what's contemplated by the volume of as you think about Q4.

Speaker #2: Your line is open .

Speaker #8: Good morning . Thank you . I wanted to extend my congratulations as well . I mean it's been a remarkable transformation . This is a much different company today than what it used to be .

So I would say Keith I will take that one.

Brad Southern: I'll take that one, Katherine. We're very pleased with the growth that we've seen in ExpertFinish after getting into the pre-finished 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 end of Q1, early Q2 next year in the neighborhood of 50 to 70 million feet. We believe that we've got a very strong value prop with our ExpertFinish line, and I've only added to that with the Naturals Collection that was launched in April. That repair, remodel contractors really enjoy using that product. We think the demand is sticky. Obviously, you need to get the contractor to get placement in the channel with our dealer partners.

Throughout Q3, our order intake and sell through rates were pretty consistent in fact, I would say.

Speaker #8: Even 10 or 15 years back . So congratulations .

Speaker #3: Thank you . Kate .

Speaker #8: And Jason look forward to working with you . Maybe to start with , can you talk a little bit about sort of you mentioned sheds volumes are normalizing in Q3 .

They held up better than maybe we anticipated given the broader broader softening in the housing and repair remodel markets.

And.

I think Thats, 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 gray.

Speaker #8: 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 ?

Speaker #6: So I would say , I'll take that one . I mean , you know , throughout Q3 , our order intake and sell through rates , were pretty consistent .

Great product additions that have helped offset the weakness in some of the market.

<unk>, we play in specific to shed.

What I would say is yes business has normalized in that segment, but we were up year over year.

Speaker #6: In fact , I would say they held up better than maybe we anticipated , given the broader , broader softening in the housing and repair remodel markets .

So we're very pleased with the progress we continue to make in that particular segment and.

Speaker #6: And I think that's a testament , really , to , you know , 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 a great product additions that have helped offset the weakness in some of the market segments we play in specific to shed .

Brad Southern: That's really our focus going forward, getting downstream as much as possible to pull that demand through for our dealer partners. Katherine, I'll just add to Jason's answer. Keep in mind that our market share in that segment is tiny relative to the opportunity. As our product gets accepted, as Jason mentioned, as contractors get to use, 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 ExpertFinish line and have a much higher market share of a large repair and remodel market.

And we see that continuing going into Q4 as.

As well are really where the softness resides is 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.

Jason I will just add to that.

Sorry, Kian I'll, just add historically, we've kind of seen a bit a bit of seasonality in the shed business where.

Our distributor partners in the shed builders tend to build some inventory in anticipation of spring and summer sales in that.

Brad Southern: Yeah. 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?

Kind of backing off as we get through the summer and I think what.

What we saw seasonally and shared is pretty consistent with the historic trends that have driven our order file in the past.

Brad Southern: Marketing is a big component. It's in-home selling to consumers primarily. 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. 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 spend we've had historically, especially if you look at percent of revenue or anything like that.

Alright.

Linda just one more question.

It seems like.

I'll follow up.

When you are selling a siding product from the OSB products.

Some transition haphazardly, we're trying to align.

I'll just add to that. Sorry, K, not just. Add that historically. We've kind of seen a bit of a bit of seasonality in the shed business where

These products.

Oh.

<unk>.

Can you talk to sort of.

What is driving that.

But more on what kind of reception you're getting.

Months.

Brad Southern: Since you brought up distribution and given the ongoing changes in the distribution 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?

Yes, I'll take that one Keith I appreciate the question.

Our our distributor partners and the shed, Builders tend to build some inventory and and anticipation of spring and summer sales. And that, you know, that, uh, kind of backing off as we get through the summer. And I think this, that what we saw seasonally in shed is pretty consistent with the historic trends that have driven our order file in the past,

So back in April we announced the integration of our OSB and siding businesses and really the main reason for that.

Target know that's uh, that's helpful and then just 1 more question. Um, it it seems like you know, you are also sort of um,

It was to better leverage our resources and better leverage.

The breadth of our product portfolio in the marketplace. So so you are right we are.

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

<unk>.

Uh, in, in, in the way you are selling yourself, your siding products and your OSB products. It seems like there is some transition happening where you're trying to align uh, both these products and and select, you know, kind of more as a bundle. Um,

Working on some bundling of <unk>.

Programs too.

Help us execute our segment strategies in all areas that we play in.

Can you talk to, sort of, you know, what is driving that, um, that move and what kind of reception you’re getting with your customers?

But I would say, we're still very much in the infancy stage of that process.

<unk> made some good.

Progress in the big builder segment, but it's still.

Brad Southern: Great. Thanks so much, and best of luck and congratulations.

Area, we're exploring largely.

Sean Steuart: Thank you, Katherine.

Got it got it that's helpful I'll jump back into queue.

Operator: One moment, please. One additional question comes from the line of Mike Roxland with Trust Securities. Please go ahead. Your line is open.

Yeah, I'll take that 1 K and appreciate the question. Um, so back in April uh we announced the integration of our OSB and siding businesses and and really the, the main reason for that uh was to better leverage our resources and and better leverage uh the breadth of our product port.

Thank you Kim.

Thank you one moment for our next question.

The next question comes from the line of Sean Stewart with TD. Cowen Go ahead. Your line is open.

Aaron Howald: Yeah. Thanks, Brad, Alan, Jason, and Aaron for taking my questions. I'll just echo what everybody else has said. Brad, congrats on your upcoming retirement, well-deserved. Jason, congrats on the new role. A lot of my questions have been addressed, but I just wanted to ask if you could give some more color around volume growth by end market in terms of single-family R&R, sheds, and manufactured housing in Q3. 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 of whether you think volumes will be flat, slightly up next year versus low single digits. Thanks.

Thanks, Good morning, everyone I'll extend my congratulations to both Brad and Jason as well.

I want to follow up on the mono walkie 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 since this section 232 determination, which OSB.

Portfolio in the marketplace. So so you're right. We are um, you know, working on some bundling of programs to uh, help us execute our our segment strategies in, in all areas that we play in. Uh, but I would say we're, we're still very much in the infancy stage of of that process. Uh, We've we've made some good, uh, progress in the big Builder segment. Uh, but it's it's still, uh, an area where exploring largely

Right now, that's helpful. I'll jump back in the queue. Good luck.

OSB and siding from Canada.

Does that factor into the decision at all and I guess broader perspective.

Thank you, thank you. Thank you. 1 moment for our next question.

The determination on section 232 sort of left it open ended that.

The next question comes from the line of Sean Stewart. With TD Cohen, go ahead. Your line is open.

Brad Southern: 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 year over year more than the other two segments. Repair, remodel was second strongest, as evidenced by our performance in our ExpertFinish business or line. Then single-family, I think it was a mixed bag. 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 and are stressed by some affordability challenges and just consumer confidence in general, that was our weakest segment in the quarter.

The administration can consider changes to the assessment as time unfolds.

Thanks, good morning, everyone. I'll, I'll extend my congratulations to both Brad and Jason as well.

I guess the short question is are you comfortable that this will be.

An extended extender a permanent <unk>.

Um, I want to follow up on the Mana walkie pivot, can you give us a sense of the timeline to at least start this project and when you think it might be producing sighting products?

<unk> for OSB and siding from Canada.

I'll leave it there.

Yes, Sean this is Aaron I'll take the 232 component of that question.

I don't think anybody is comfortable that policies are current in the current administration, but I will say that the.

The decision to shift to Milwaukee should we make it will be a long term decision based on our long term expectations about the evolving OSB and siding markets.

And and attached to that question, does the section 232 determination which exempts OSB? And inciting um from Canada? Does that factor into the decision at all? And and I guess broader perspectives the the the determination on Section 232 sort of left it open-ended that

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.

The administration can consider changes to the assessments as time unfolds. Um, I guess the short question is, are you comfortable that this will be a

And 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 the other.

An extended extend or a permanent ex uh exemption uh for OSB in sighting from Canada. I'll leave it there.

Yeah, Sean, this is Aaron. I'll take the 232 component of that question. Um,

Aaron Howald: I'm going to address the second question briefly. 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. 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. Understood. 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?

I will say that.

Other large equipment for for a conversion of an OSB plant in Canada, we would be able to import that equipment at a lower cost into Canada and into the U S. Because of those tariffs I would like to stress, though that that would be a potential benefit, but it's not a reason right exactly.

Yes. The 232 issue is not the decision maker. It is it is noise that currently is a net benefit but the long term reasons for for Milwaukee should we make that decision would be that.

The the the decision to shift to manaaki, should we make it will be a long-term decision based on our long-term expectations about the evolving OSB and siding markets. Uh, 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. Uh, and and uh, perhaps a less understood, uh, component of the 232 discussion is that the importation of some heavy equipment categories?

Fundamental market dynamics, and the efficiencies that that mill would bring Sean.

Brad Southern: Plenty of capacity. We can add shifts in existing facilities. 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.

The process as you can tell as we've gone.

We've tried to be transparent on these calls and talk about the different options.

Some rise to the top end and some phase from the top and so it is certainly dynamic but.

The evaluation that we do is financially driven long term financial driven.

Into the United States, uh, is less favorable than it is into Canada currently. So, for example, if we were to acquire a press or other, large equipment for the conversion of an OSB plant in Canada, we would be able to import that equipment at a lower cost into Canada than into the U.S. because of those tariffs. I would like to stress, though, that that would be a potential benefit, but it's not a reason. Right. Exactly. But the

As Aaron said and there are components.

Aaron Howald: Got it, guys. Thank you.

Brad Southern: Thank you. Welcome.

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

Specifically to tariffs or but when you look it would cost you look at particularly network network net work optimization Manitowoc is in a really interesting place for us when you when you align it with our existing infrastructure, including what we're doing around export finished growth.

Yeah, the 232 issue is not the decision for the maker. It is it is noise that currently is a net benefit. But the long term reasons for for manufacturing, should we make that decision would be that

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

the fundamental market dynamics and the efficiencies that Mill would bring.

Sean the white, you know the process is as you can tell as we've gone, you know uh

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

So, but as we continue to do the evaluation over the next.

Try to be transparent on these calls and talk about the different options. And

Several quarters, we will continue to evaluate all options in the face of a good strong financial analysis, and then when we get ready to present to our board. That's when we were at the rubber hits the road around.

Crystallizing around one facility and being able to explain.

From a return standpoint, while that one was chosen so more to come on that but we did think it was worth.

Mentioning Manitowoc he is a prime candidate or perhaps the prompt candidate right now given that we haven't talked about that much in the past.

Some rise to the top and in some fade from the top. And so it is, it is certainly Dynamic. But you know, the the evaluation that we do is financially driven, long-term Financial driven is, is, is Aaron said. And um, there are components that specifically to tariffs or but, you know, when you look at would calls, you look at particularly network network network network optimization manual walk is in a really interesting place for us. When you, when you line it up with our existing infrastructure, including what we're doing around expert, finish growth,

Understood and then maybe just one follow up there Brad.

and so, um, but as we continue to do the evaluation over the next,

Part of this.

Reordering of the options is the extent to which OSB markets unraveled here the last several months.

I mean, you position. This is a long term decision based on optimization of the fiber basket.

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 are considering manner walkie and in that context as well this could be <unk>.

You know, uh, several quarters, uh, we'll continue to evaluate all options and and the face of a good strong financial analysis. And then when we get ready to present to our board, you know, that's when we the rubber hits the road around, uh, you know, crystallizing around 1 facility and being able to explain, you know, from a, from a return standpoint, while that 1 was chosen, so, um, more to come on that, but we did think it was worth, um, mentioning manawakie as a as a prime candidate or make perhaps the prime candidate right now, given that we haven't talked about that much in the past.

Longer trough than we're accustomed to seeing for OSB.

No we were not intending to signal that at all certainly.

Understood and maybe just 1 follow-up there Brad. I you know part of this.

The near term outlook for OSB is pretty abysmal, but.

Um, the extent to which OSB markets unraveled here, uh, in the last several months.

We believe in the business in the long term really.

Put this one up.

As Jason mentioned or I mentioned.

I mean you you positioned this as it's a long-term decision based on optimization of the fiber basket. The the portfolio you have

In the prepared remarks.

The timing we were leaning on Holton calls, we felt that we could get there faster with the conversion.

Is there any read through on you view this OSB? Downturn as potentially extended beyond what we would normally see.

And so really it's the overall softening.

And the housing outlook overall gave us say another year of capacity.

And you're considering manaaki in that context as well. This could be a longer trough than we're accustomed to seeing for OSB.

And our existing network, which allowed us to take a step back and say if we're not as much of a hurry because we felt we were in six months ago quarter or are there other options and thats really when we started.

Focusing in on Mandy was not OSB related that drove that.

Yes.

Hi, Jim.

Standby, please I believe here Mike.

Just one out for a minute.

No, we, we were not intending to signal that at all. I mean, certainly the, you know, the near-term outlook for OSB is pretty abysmal but um, we, we believe in the business in the long term, really? What put this 1 up? Uh, was as Jason mentioned or I mentioned in the in the in the prepared remarks. The the the timing we we were we were leaning on Holton because we felt that we could get there faster with a with a conversion. Um, and so when really it's the overall softening in the in the housing Outlook. Overall, G gave us say another year of capacity, uh, uh, 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,

and 6 months ago what are other other options and that's really when we started um you know focusing in on Mandy was not OSB related that drove that

Standby, Sean are you still able to hear me Danielle.

Hi can you hear there.

I cannot know okay, great I, just wanted to double check I am going to have them dial back and if everyone could please standby.

Standby, please. I believe your mic.

Mic just went out for a minute.

Please standby for a moment, while we get.

Everyone reconnected.

Stand by Sean, are you still able to hear me?

I can hear them. I cannot know.

Joe can you hear us now.

Oh, Yes, again, great can hear you and Sean Youre still there.

Okay, great. I just want to double check. Um, I'm gonna have them dial back in. If everyone could please stand by

I am I'm all good guys.

You can go onto the next.

So you got.

Did you hear it I mean, it was such a great is probably the best answer my CTO career, and I got cut off.

Please stand by for a moment while we get everyone reconnected.

You're leaving on a high note I think I got the gist of it.

Okay guys.

Thanks, Sean.

Thank you standby for our next question please.

The next question comes from the line of Mark Weintraub with Seaport Research partners. Please go ahead.

I don't know Brad I don't know if I should ask any more questions after that.

Joe, can you hear us now?

Yes.

Oh yes, we can great. I can hear you and Sean, you're still there.

Congrats to all of course.

I am, I'm all good, guys. Uh, you...

So maybe just a little bit more on the thinking on that matter walkie Halton.

Can go on to the next.

You go.

So I mean your volumes this year arent that different from what you were expecting so I mean, it seems to suggest that your.

Me up with such a great. It's probably the best answer of my CEO career and I got cut off in the middle of this. You're leaving on a high note. I think I got the gist of it. Uh all good guys.

Taking a little bit more of a cautious perspective on next year and obviously, it's pretty early.

Thanks, Sean.

Thank you. Stand by for our next question, please.

Maybe help us think that through a little bit in <unk>.

When you say several quarters does that mean youre kind of thinking.

The next question comes from the line of Mark, Winrow with Seaport research Partners. Please go ahead.

You don't need it for close to a year later than what you would have initially anticipated wanting the volume up.

I don't know, Brad, I don't know who should ask any more questions after that, that high note.

Mark it's really.

The key driver as we were forecasting internally improving.

But, but congrats to all, of course. Um, so maybe just a little bit more on the thinking on the Manaaki Holton.

Housing starts at a pace higher than the current forecast is and so on.

Um, 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...

When we were looking at.

I don't know the industry, adding 75000 to 100000, new starts each year year over year over year.

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 there seems pretty flat.

Taking a little bit more of a cautious perspective on next year, and obviously it's pretty early. Um, maybe help us think that through a little bit. And and when you say several quarters, does that mean, you're kind of thinking you? It's like a you don't need it for close to a year later than what you would have. Initially anticipated wanting the volume up.

Low single digit growth year over year.

So that difference in outlook for housing.

Okay has given us some degrees of freedom on timing for it I will say, it's been really nice to see so ago operating at the level that it's operating at now which has provided a good bit of.

Marcus, really the key driver is we were forecasting internally improving housing starts, you know, at a pace higher than the current forecast.

Near term headroom on that.

And so but.

I do feel like I.

I do know that the reason we were able to take a breath on expediting. Our mill conversion is helping as we just looked at the housing forecast that folks are putting out there and as we aligned with that we felt like we had another year.

And so when we were looking at, you know, I don't know the industry adding 75,000 to 100,000 new starts each year year-over-year over year, you know, that was that was got us on a a path of you know sooner rather than later on this conversion.

But as we've looked at the, the, the the, you know, the most recent starts forecast that we follow their, it seems pretty flat, you know, or you know, low single digit growth year-over-year.

Time to make a conversion.

<unk> is being very rushed in you know rushed caused us to go to holton because it would be the quickest, but it also Russia would have significantly increased the capital expense too. So I think we're in a good place to where we're still got headroom that we need.

and so that difference in Outlook for housing, you know, to you know get has given us some degrees of freedom on

If housing wants to get stronger than forecasted, which we certainly hope happens, but we feel really good about having options other than holton, which will be a little more capital efficient for us.

And maybe could you expand a little bit on that in terms of.

Capital efficiency, recognizing you are still in the evaluation stage, but.

Order of magnitude how much capital might be required for Amanda walkie conversion and also does this mean that your cap spend in 'twenty 'twenty six is actually going to be.

Timing for it. I will say, you know, it's been really nice to see us go look operating at the level that it's operating at now, which is provided a good bit of uh, near-term Headroom on that. Um, and so but I I I do, I do feel like the I mean I do. I know that the reason we were able to take a breath on Expediting a meal, conversion is Halton, as we just looked at the the housing forecast that that folks are putting out there. And and as we aligned with that, we felt like we had another year uh uh ah ah time to make a conversion versus being very rushed and you know rushed calls us to go to Holton because it would be the quickest. But it also

More reduced than maybe what some of us would've been thinking previously.

Great questions, Mark none of which were really in a position to answer with sufficient.

Would 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 uh, if if, if housing was to get stronger than forecasted which we were certainly hope happens but we feel really good about having options other than Holton which will be a little more Capital efficient for us.

Our reliability our confidence yet, we'll we'll deliver more on this topic.

Full year earnings call in February.

Okay fair enough, sorry, which is known not.

Understood and then.

And then just lastly, if I could.

So would the shed business.

Obviously, it had been quite weak last year much stronger. This year can you give us any sense as to like where the shed business and I recognize even you guys don't have perfect visibility on this but.

Super and maybe could you expand a little bit on that in terms of um Capital efficiency recognizing you're still in the evaluation stage? But um order of magnitude um how much Capital might be required uh for for a man of walking conversion and also does this mean that your cap spend in 2026 is is actually going to be, you know, uh,

More reduced than maybe, what some of us would have been thinking previously.

Your best estimate of where where that business is now relative to kind of trend line or did we 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. This really strong growth just got us back up to what you would consider to be kind of a typical year.

Topic on our full year, earnings call in February.

Great question. Sorry. We just not in a position to answer understood. Um, and and then just just last, if I could, um, so with the sheds business,

Yes, I'll take that one so what I'd say.

Yes, there was a fair amount of pull forward demand and shed during COVID-19.

So our business was very strong in those years.

And to some extent we saw.

Supported that segment to a higher degree than others, while we were on a managed order file.

That pullback that we felt in in late 'twenty three 'twenty four I think was a result of that and 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 a couple of.

Um, obviously it had been quite weak last year, much stronger this year. Can you give us any senses to like where the sheds business and Iraqi? Even you guys don't have perfect visibility on this but your best estimate is where where that business is now relative to kind of trend line. Or I mean, did did we did we um have some catch up this year so that there's 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.

Points.

<unk>.

Relative to two kind of a normal rate.

So we feel good about that business and it's been very consistent for us through the years and.

Feel good about opportunities, we have to improve our share position there as well.

Thanks, so much and congrats.

Both again thank you.

Thanks Mark.

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.

Great, Thanks, and congrats Jason and Brad.

Yeah, I'll take that 1. So, so what I'd say, um, you know, there was a fair amount of, uh, pull forward, demand and shed during, uh, Co um, so our business was was very strong in those years and, and to some extent, you know, we we, uh, supported that segment to a higher degree than others while we were on a managed order file, um, that pullback that we felt in in late 2324. 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

Just wanted to go back to some of the comments.

Fabricators that we talked to are saying their business is up, you know, a couple points. Um,

Around the fourth quarter siding volumes.

Can you just talk about what you're hearing from your customers.

And in terms of maybe a little bit of demand degradation and then how.

Perhaps managing inventory levels and the price increase factored in if at all.

Uh, relative to, to kind of a normal rate. Uh, so we feel good about uh, that business and you know, it's been very consistent for us through the years and uh, feel good about opportunities. We have to improve our share position there as well.

Thanks so much and congrats.

Both again, thank you.

For.

1 moment for our next question.

Yes, thanks Kurt.

I guess I said this earlier, but I mean, the process is very consistent with what we've done in prior years when we look at.

The next question comes from the line of Kurt. Jinger with da Davidson. Go ahead. Your Line's open

Great, thanks. And congrats Jason and Brad.

Historical purchases kind of where demand is trending and then come up with.

Allocations for our distributor partners and then obviously work with them closely through that process.

They are communicating that theyre going to shorter customer on the other end by no means will we hold them to that allocation specifically so it is pretty fluid in nature.

Um I just wanted to go back to some of the comments. Um just around the fourth quarter, siding volumes. Um, could you just talk about? I mean, what you're hearing from your customers um in terms of maybe a little bit of demand degradation and then how, you know, perhaps managing inventory levels and and the price increase factored in if at all.

With the end goal being not too.

Increased channel inventories as we go into the new year and worked through.

Rice increase so.

So far.

Yeah, I think that's been well received and there are customers that are certainly asking for more.

Yes, thanks Kurt. Um, you know what? I, I guess I said this earlier, but, I mean it, the, the process is very consistent with what we've done in Prior years. You know, we look at, uh, historical purchases, kind of where, uh, demand is trending and then come up with, um,

But that's something that we closely manage on a week to week basis.

Okay. That's helpful and then.

Just looking forward to 2026, a little better.

What areas of deciding portfolio do you maybe have the highest conviction or 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 kind of what are you most focused on.

There in terms of strengthening our position.

With different channel partners and whatnot. Thank you.

Uh, allocations for our our distributor partners, and then obviously work with them closely through that process. If, if uh, they're communicating that they're going to short a customer on the other end, by no means, uh, will we hold them to that allocation specifically? So it is pretty fluid in nature, uh, with the end goal being not to uh, increase Channel inventories as we go into the new year and work through, uh, a pricing increase. So, uh, so far, um, yeah, I think that's been well received. And, you know, there, there are customers that are are certainly asking for more, um, but that's something that we closely managed on a a week to week basis.

I'll take that one as well.

What I would say.

Got it.

Very focused segment strategies for new construction repair remodel and then off site, which include shed and manufactured housing segment.

And those are the three segments that we will be relentlessly focused on.

Okay, that's helpful. And then, um, just just looking forward to 2026 a little bit. I mean, what areas of deciding portfolio? Do, do you maybe have the highest conviction or, or visibility to at this stage in terms, of delivering, kind of above market growth and and continuing the momentum?

Improving our share position and we're investing resources in all three pretty equally maybe maybe a little bit heavier in repair remodel.

But we feel like there is an opportunity to continue to take a half point to a point of share.

And separately from a marketing or or Channel standpoint and what are you most focused on? Um there and in terms of you know strengthening your position um with different Channel partners and whatnot. Thank you.

The addressable market on an annual basis, as we think about the future.

Okay.

Okay.

Standby for our next question please.

But I'll take that 1 as well. Um, you know what, I, what I would say is, you know, we've got, um, very focused segment strategies for new construction repair Remodel, and then off-site, which includes shed and manufactured housing segment. Um, and and those are 3 segments that we will be relentlessly focused on. Uh,

The next question comes from the line of Anna Adam Baumgarten with vertical Research partners. Please go ahead.

Hey, guys. Thanks for taking my question. Some expert finished can you kind of update us on where margins are there, especially with managed order file currently.

Margins still have that good but they still have a long way to go.

Equally maybe maybe a little bit heavier in repair remodel. Um, but we feel like there's an opportunity uh, to continue to take, you know, a half point to a point of share, uh, of the addressable Market. Uh,

An annual basis as we think about the future.

Under this kind of circumstances, so again I still see.

Both.

Outsized.

We've certainly had outsized price increases on expert finished and we're making progress on the cost side. So.

Standby for our next question, please.

Think the future is bright for continued margin increase but there is still lagging.

Our fundamentally.

The next question comes from the line of Adam Bumgarden, with Vertical Research Partners. Please go ahead.

Framed offering.

There is nothing but opportunity there.

Okay, great. Thanks, guys.

Okay.

Hey guys, uh, thanks for taking my question. Um, is the expert finished? Can you kind of help guide us on where margins are there, especially with the managed order file currently?

Thank you our last call comes from the line of Steven Ramsey.

Stevens with Thompson Research Group. Please go ahead your line is open.

Hi, This is Katherine Thompson in for Stephen today, Thank you for.

Um, margins still have that good, but they still have a long way to go, um, under this kind of circumstances. So again, I still see, uh,

Both.

Jamie on the Q&A today.

Answered many many good questions, but wanted to follow up to some of you on expert finish.

And have been taking some share gains.

Both for the quarter and as you think about the year can you parse out the drivers between channel versus winning shelf space.

Outsized. We've certainly had outsized price increases on Expert Finish, and we're making progress on the cost side. So I think the future is bright for continued margin increase, but they're still lagging, um, fundamentally, our, uh, primed offering. So there's nothing but opportunity there.

Okay, great. Thanks, guys.

And end market demand and then against.

Thank you. Our last call comes from the line of Steven Ramsey.

The second part of this is against a pretty challenging R&R market.

It's with Thompson research group, please go ahead, your line is open.

Uh huh.

How sustainable do you feel these market share gains are on a go forward basis.

I'll take that one Kathryn.

So we're very pleased with the growth.

We've seen an expert finish after getting into the pre finished 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 end of Q1 early Q2 next year.

We had a $50 million to $70 million.

Feet.

Hi. This is, uh, Katherine Thompson. And for Steven today, thank you for, um, including me in the Q&A today. Um, answered, you know, many, many good questions, but, uh, wanted to follow up just on a few on Expert finish, um, and have been taking some, some shares. But but, I suppose for the quarter and that you think about the year, can you parse out the drivers between Channel versus winning shelf space, uh, and and market demand, and then um against if it the second part of this is against a pretty challenging R&R Market.

We believe that we've got a very strong value prop with our expert finish line and you have only added to that with the Naturals collection that was launched in April.

Uh, how sustainable do you feel these market share gains are uh on a go forward basis.

And that repair remodel contractors really engie.

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 and that's really our focus going forward is getting downstream as much as possible to pull that demand through for our dealer partners.

I'll, I'll take that 1 Katherines, I think it was back in 2020. Um, you know, we are on a managed order file right now, but we have uh, incremental capacity coming online at the end of q1 early Q2 next year uh in the neighborhood of 50 to 70 million

Catherine I would just add to adjacent answer that.

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 it as you mentioned as we secure shelf space for the one step distribution network.

Ton of upside in our ability to continue to grow that expert finish line.

Have a higher a much higher market share of a large repair and remodel market.

And do you need to step up marketing expenses next year.

Uh, feet. Um, we, we we believe that we've got a very strong value prop, with our expert Finish Line and you know, of only added to that with the naturals collection that was launched in April, um, and that repair remodel contractors, uh, really, uh, enjoy using that product. So, um, we think the demand is sticky. Um, obviously you need to get the contractor to get placement in the channel, uh, with our our dealer partners and that's really our Focus going forward is getting Downstream is, is much as possible to pull that demand through for our our dealer partners.

Being that share gainer or are there other ways.

To increase stickiness.

Katherine, I'll just add to Jason's answer that the, um, keep in mind that our market share in that segment is

Marketing is a big component.

It's in in home selling to consumers, primarily and so as you know.

If you if you parse our sales and marketing budget and particularly the marketing budget. It is skewed toward support.

Repair and remodel segment more than.

Any other segment by a pretty large margin.

Uh, relative to the opportunity and as our product gets accepted, as Jason mentioned, his contractors get to use. And as you mentioned, as we secure shelf space with the 1 Step distribution Network, there's just a ton of upside in our ability to continue to to grow that expert Finish Line. And and, you know, have a higher a much higher market share of of a large repair and remodel Market.

But I think what Youll see next year in our budgeting will be consistent with what our guidance would be consistent with the kind of spend we've had historically, especially if you like a percent of revenue or anything like that.

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

And since you brought up distribution.

And then the <unk>.

Ongoing changes and the distribution landscape in the U S.

Are you seeing any type of behavior changes for you as a supplier.

P market given some of the fundamental changes in distribution.

Marketing is a big component to, you know, your it's in. It's in home selling to Consumers, primarily. And so, as a, you know, if you, you know, if you parse our sales and marketing budget, particularly the marketing budget, it is skewed toward support uh, of the repair and remodel segment more than

Yeah, I would say right now.

We're very.

Pleased with the partners, we have from our two step distribution.

Respective and that those relationships are on very solid footing in and.

A pretty large margin, but I think what you'll see next year in our budgeting will be consistent or with our, with our guidance, to be consistent with the kind of spin. We've had historically, especially if you like a percent of Revenue or anything like that.

Look forward to continuing to work with our partners, but no no real significant disruption now.

Okay great.

So much and best of luck and congratulations.

Okay. Thank you.

Yes.

The distribution landscape in the US. Um, are you seeing any type of behavior changes for you as a supplier? Uh, to the distribution Market given some of the fundamental changes in distribution?

One moment please.

Yeah.

One additional question comes from the line of Mike <unk> with Trust Securities. Please go ahead. Your line is open.

Yeah, Thanks, Brad LNG isn't Darren for taking my questions in the cycle, what everybody else's head Brad Congrats on your upcoming retirement, well deserved and Jason Congrats on the new role.

Yeah, I I would say right now, um, you know, we're very uh, pleased with the partners. We have from a

a 2-Step distribution uh perspective and that you know, those relationships are on very solid footing and and

One of my questions have been addressed but I just wanted to ask if you guys. If you could give some more color around volume growth by end market in terms of single family R&R and sheds and manufactured housing and three Q.

You know, we look forward to continuing to work with our partners, but no real significant disruption now.

Okay, great. Uh, thanks so much and a best of luck and and congratulations.

And how should we think about siding volume growth how do you look at the 2020. Thanks I know it was asked recently, but just trying to get a sense whether you.

Please.

Do you think volumes will be flat slightly up next year.

when additional question comes from the line of Mike roxland with tryst Securities, please go ahead, your line is open

It was low single digits.

Thanks.

Okay.

So I'll touch on the first part of the question.

Just looking at.

Yeah, thanks, Brad. Allen G is in there for taking my questions, and I'll just check on what everybody else has said. Brad, congrats on your upcoming retirement; well-deserved! And Jason, congrats on the new role.

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.

Um, lot of my questions have been addressed but I just wanted to ask if you could, if you could give some more color around volume growth by and market in terms of single family, RNR and sheds and manufactured housing uh in 3Q.

Repair remodel was was second strongest as.

As evidenced by our performance and.

Our expert finish.

And how should we think about deciding volume growth? As we look at the 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.

Business our line.

And then single family I think it was a it was a mixed bag we had.

Thanks.

Decent.

<unk>.

Decent volume and some of our core markets, but in.

In the southern markets that are dominated a little bit more by the big builder.

And our stress by.

Bye bye as some affordability challenges and just consumer confidence in general we have that was our weakest segment in the quarter.

Yeah.

I'm going to address the second question briefly I think it's too early for us to make a sort of convincing call on 2020 as you know we have <unk>.

Pretty good visibility within that quarter and when we 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.

So, I'll touch on, uh, the first part of the question. Um, just looking at at, uh, Q3 versus prior year by segment. Um, as I mentioned earlier, even though shed volume, um, came off slightly versus, uh, Q2. Uh, it was up over year-over-year. Uh, more than, uh, the other 2 segments. Uh, repair remodel was was second strongest, um, as evidenced by our performance in, uh, our expert finish, uh, business or line. Uh, and then single family. I think it was a, it was a mixed bag. You know, we had, uh, decent, um,

Understood and then just one quick follow up.

If you see housing rebound more quickly next year than you expected what levers do you have available to meet that increased sidesman now that you're pushing out some of your capital projects.

Decent volume in some of our core markets but, uh, in the southern markets that are are dominated a little bit more by the big Builder, um, you know, and and our stress, uh, by by some affordability challenges and just consumer confidence, in general, we have that was our weakest segment in the quarter.

Plenty of capacity.

We can add shifts in existing facilities.

Um, I'm going to 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, we have

So yes, we will have no problem responding to.

Almost any imaginable demand scenario over the next couple of years.

In either of our businesses.

South America.

Yeah.

Pretty good visibility within a quarter. Um, and when we, when we get to February, that what we see within the, the the first quarter to behavior will, of course color, our view of 2026, at which point, we'll provide some full year guidance.

Got it guys. Thank you.

Okay. Thank you welcome. Thank you.

This does conclude the question and answer session I would now like to turn the call back to Erin for closing remarks.

Okay. Thank you everybody for joining the call, we'll look forward to continuing the conversation and follow up calls later today and conferences throughout the quarter. Thank you very much.

Understood and then just 1 quick follow-up. Um, if you see houses in rebound, more quickly, next year than you're now expecting, you know what, levers, do you have available to meet that, increase side of men now that you're pushing out some of your capital projects?

Point of our capacity is, uh, we can add shifts in existing facilities.

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

Uh, so you know, we will have no problem responding to...

Almost any imaginable, demand scenario, over the next couple years.

And either of our businesses.

Or South America.

Got it guys. Thank you.

Okay, thank you. You're welcome. Thank you.

This does conclude the question and answer session. I would now like to turn the call back to Aaron for closing remarks.

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

Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect