Operator: Good day, and thank you for standing by. Welcome to the Q1 2026 Louisiana-Pacific Corporation Earnings Conference Call. After the speakers' presentation, there will be a short question-and-answer session. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 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. Please go ahead.
Aaron Howald: Thank you, Operator, and good morning, everyone. Thank you for joining Louisiana-Pacific Corporation to discuss our financial results for 2026 and our updated guidance for the second quarter and the remainder of the year. Hosting the call with me this morning are Jason Ringblom and Alan J. Haughie, who are Louisiana-Pacific Corporation’s chief executive officer and chief financial officer, respectively. After prepared remarks, we will take a round of questions. During today's call, we will be referencing a presentation that has been posted to Louisiana-Pacific Corporation’s IR website, which is investors.lpcorp.com. Our 8-K filing, earnings press release, and other materials are also available there. Finally, today's discussion contains forward-looking statements and non-GAAP financial metrics, as described on Slides 2 and 3 of the 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 by reference. And with that, I will turn the call over to Jason.
Jason Ringblom: Thanks, Aaron. Good morning, everyone, and welcome to Louisiana-Pacific Corporation’s earnings call for 2026. We appreciate you joining us. I am proud to say that in the first quarter, Louisiana-Pacific Corporation navigated the challenges of a complex market exceptionally well. Against an increasingly volatile macro backdrop, and despite significant impact from winter storms and the conflict in Iran, we delivered on our guidance. Price realization both in Siding and OSB exceeded our expectations, partially offsetting lower volumes and contributing to EBITDA performance above the high end of our guided range. I will discuss our results for the quarter at a high level before describing what we are seeing in the various markets that we serve. One highlight that we are incredibly proud of is our safety performance in the quarter. Louisiana-Pacific Corporation team members in North America worked over 1 million and a half hours with a world-class total incident rate of only 0.26. I also want to recognize our newest Siding mill in Segola, Michigan, for achieving two years without a recordable injury. Our goal will always be zero injuries, but I want to personally thank every Louisiana-Pacific Corporation team member who contributes to our award-winning safety culture. From a macroeconomic perspective, given the trajectory with which the housing market weakened over the course of 2025, we expected the first quarter would be a challenging comparable. Accordingly, as you can see on page 5 of the presentation, our net sales were down compared to the prior-year quarter, driven largely by softer OSB demand and lower commodity prices, which fell below EBITDA breakeven for Q4 of last year and Q1 of this year. OSB price softness accounted for a $66 million reduction in net sales and EBITDA. By contrast, the pricing power of SmartSide helped offset lower sales volume, moderating revenue declines. Louisiana-Pacific Corporation delivered EBITDA in the quarter of $82 million, representing an $8.08 billion decline year over year, primarily from $66 million in lower OSB prices which I mentioned earlier. Siding EBITDA was only $5 million lower despite 10% lower net sales, with the remaining roughly $9 million attributable to other factors, including South America and higher corporate unallocated expenses. For the quarter, Louisiana-Pacific Corporation delivered $0.38 in adjusted earnings per share and returned $21 million to shareholders via dividends. I am pleased to share that we saw minimal impact from crude oil price volatility in the first quarter. This reflects both near-term agility of our supply chain and operations teams as well as the longer-term algorithmic structure of many of our strategic supply contracts. We did see modest increases in freight rates, which was not surprising given how quickly diesel prices respond to crude oil supply disruptions. Overall, however, other inflationary impacts were minimal in the quarter. Alan will share some sensitivity analyses later to help model the direct and indirect impacts of crude oil price volatility on our raw material costs in the second quarter and beyond. Next, I will go a layer deeper and spend a few minutes describing how the quarter unfolded across the three market segments that the Siding business serves, each representing roughly one-third of Siding volume. I will start with off-site construction, which includes both sheds and manufactured housing. While currently largely consisting of shed volume, opportunities are plentiful to grow market share in manufactured housing as well. As discussed in our prior call, prebuys in advance of our annual price increase resulted in elevated channel inventories. This was not exclusively a shed phenomenon, but the impact was disproportionately felt in this segment. In February, we anticipated that this would be a drag on first-quarter volumes while expecting channel inventory to normalize in Q2. I am pleased to say that this has played out more or less as we expected. While shed volumes were off significantly in the first quarter, sell-through rates held up quite well, and channel inventory is now back within seasonally normal ranges. Another third of Louisiana-Pacific Corporation’s Siding volume goes into the repair and remodeling market, with prefinished ExpertFinish being our fastest growing product line within this segment. In the first quarter, ExpertFinish accounted for 12% of our Siding volume and 18% of Siding revenue. We believe that ExpertFinish has a long runway for growth and continued share gains, and we are investing accordingly to support that demand. Our newest ExpertFinish line in Green Bay, Wisconsin, which adds approximately 50 million square feet, or 25%, to annual capacity, is now ramping up and making excellent progress. We also plan to add a further 20 million square feet of capacity at our Bath, New York facility later this year and finally, in late April, we acquired a piece of land in North Branch, Minnesota, where we intend to build additional ExpertFinish capacity to support growing demand over time. The final third of Louisiana-Pacific Corporation’s Siding is used in new residential construction. One of our most significant growth opportunities is with the national homebuilders, where we remain relatively underpenetrated. We believe we are uniquely well-positioned to build mutually beneficial partnerships with these homebuilders by leveraging SmartSide’s labor-saving value proposition together with our integrated portfolio of OSB and Siding. So far in 2026, we have secured two new builder partnerships, and we continue to actively pursue additional opportunities. Just to give you a sense of scale for the business we recently secured, with the nation’s largest homebuilders, as well as the magnitude of the opportunity ahead, I will share some specifics. We currently expect to supply about 100 million square feet of SmartSide in total to 15 of the top 25 U.S. homebuilders. We estimate that this represents a high-single-digit share of the total exteriors market for these builders, and a similar high-single-digit percentage of our overall SmartSide volume. Again, we believe that the unique value proposition we can offer these homebuilders gives us significant opportunities for additional growth in the years to come. Finally, before I turn the call over to Alan, I want to recognize Dusty McCoy and Ozi Horton, both of whom retired last week from Louisiana-Pacific Corporation’s board of directors. Personally and on behalf of the entire Louisiana-Pacific Corporation team, I want to thank Dusty and Ozi for their insights, their thoughtful counsel, and their contributions to Louisiana-Pacific Corporation’s culture and strategic transformation. With that, let me turn the call over to Alan for a more thorough review of Louisiana-Pacific Corporation’s financial results and our updated guidance. Thank you, Jason. I would also like to add my thanks and congratulations to the whole Louisiana-Pacific Corporation team for a very strong—
Alan J. Haughie: —quarter for safety, and to Dusty and Ozi for their service on Louisiana-Pacific Corporation’s board of directors. I know I have certainly benefited from their wisdom and guidance over the last seven years. Okay. The first-quarter performance for Siding is shown on page 8 of the presentation. In line with expectations, unit volumes were down by 18% year over year. And as discussed on the last earnings call, in addition to a slowing market, we exited the fourth quarter with increased channel inventory following the announcement of our January price increases. A disproportionate amount of that inventory was held by serving our shed customers, where elevated inventory led to volume declines both sequentially and year over year. ExpertFinish, on the other hand, continues to be the best performing product category within Siding, which in this market means volumes are flat. The 9% increase in selling prices partly mitigated the decline in volume, with primed prices increasing by 8% and ExpertFinish prices increasing by 10%. Now there are a few moving parts within all of this, so let me briefly unpack it. The largest single contributor to the reported 9% price increase is naturally our January 1 list price increase, which averaged four to five points. The remainder, let us call it four and a half points, is roughly two and a half points from favorable mix and around two points from rebate refinements. Now the mix dynamics are the result of lower volume of shed products within the primed product category and relatively strong volumes for ExpertFinish, including the two-toned Naturals subcategory which we launched in 2025. And what I referred to as rebate refinements is the final recognition of lower-than-expected rebate payments relating to the fourth quarter of last year as well as modestly lower rebate accrual rates in 2026. Both factors are, of course, volume related. As we look toward the second quarter, we expect list price realization to remain steady, of course, while mix and rebate impacts will probably normalize somewhat. So price and volume combined for a revenue reduction of $42 million, but an EBITDA hit of only $8 million. The $2 million reduction in selling and marketing costs is merely timing, and while inflationary costs have been mild so far, I will discuss this subject further in a moment. The other bar includes the nonrecurrence of the EBITDA benefit of last year’s OSB production at Siding mills, more than offset by some inventory build in anticipation of maintenance outages later in the year. The resulting EBITDA margin of 28% for Siding was, of course, helped by the rebates and inventory dynamics I mentioned earlier, and would be closer to last year’s 26% without these factors. But in the long run, the roughly 50% incremental EBITDA on volume, albeit a decline this quarter, shows the significant leverage that this business will deliver as and when growth resumes. For OSB on page 9, price is once again the dominant element. In 2025, OSB prices were at their highest in the first quarter, fell significantly in the second, and have been mired in the EBITDA breakeven for the past several months. As a result, prices are 28% lower than the first quarter of last year, resulting in $66 million less revenue and EBITDA. Low OSB volumes for both commodity and Structural Solutions reduced sales and EBITDA by a further $30 million and $10 million, respectively. Now the operations team did an outstanding job of controlling what they can: operating efficiently, minimizing costs, and prioritizing safety. As a result, mill overhead and SG&A contributed $5 million in year-over-year savings. And the $3 million negative shown in the Siding waterfall from lower OSB transfers is offset here with income. All of this results in a $12 million EBITDA loss, better than our guidance amidst a very challenging demand and price environment. Cash flow on page 10 shows net operating cash outflow of $38 million compared to an inflow of $64 million last year, reflecting the $80 million reduction in total EBITDA and a somewhat larger-than-usual buildup of log inventory. Cash ended the quarter at $164 million, and we have $900 million in liquidity, including our undrawn revolver. Now, before I conclude with our updated guidance, let me address the impact of crude oil prices on Louisiana-Pacific Corporation’s raw material and freight costs as shown on page 11. Starting with freight, roughly speaking, we estimate that each $10 per barrel increase in crude oil corresponds to a $0.03 per mile increase in Louisiana-Pacific Corporation’s variable freight cost, on a blended basis assuming current rail-truck mix and refinery margins. Louisiana-Pacific Corporation experienced total freight usage of the order of 30 million miles in 2025. So the full-year freight cost impact of each $10 per barrel increase in crude oil prices, all else equal, would be an annual impact of about $1 million. In OSB, freight is generally passed through, while Siding is priced on a delivered basis, so the EBITDA impact to Louisiana-Pacific Corporation would be mitigated by that dynamic. I should also add that Louisiana-Pacific Corporation Siding is lighter and more durable than some competing alternatives, which allows us to ship by rail and transport much more volume on a truck than these competitors can. For raw materials, excluding logs, many of our inputs have crude oil as feedstock, including resins, primer, and paint. And, of course, the delivered cost of these materials includes some freight. For raw materials across Louisiana-Pacific Corporation’s North American business, we estimate that the total annual cost impact of each $10 per barrel increase in crude oil is of the order of $1.5 million to $2 million per quarter, or $6 million to $8 million per year, all else equal. This would be split roughly 75/25 between Siding and OSB, given Siding’s more raw-material-intensive recipe. Louisiana-Pacific Corporation can experience a slight cost impact for logs when higher diesel prices impact harvesting and delivery costs, but compared to the freight and raw material costs, the log cost impact is small enough to be immaterial for modeling purposes. Now bear in mind that these are estimates of annual impacts. Many of our raw material supply contracts have trailing algorithmically adjusted prices with varying update cycles, so the specific timing of these various impacts is more variable. We saw minimal impacts in the first quarter, but if prices stay elevated, we will trend towards these annual run rates over the next two quarters or so. Our raw material cost estimates are incorporated in our updated guidance as shown on slide 12. Unlike our approach to OSB guidance, we will explicitly avoid any attempts to predict future crude oil prices. And frankly, we are less concerned about the cost impact of higher crude oil prices than we are about the broader macroeconomic and demand impacts and the general volatility driving them. You will recall that our full-year guidance was predicated on housing starts being flat year over year. Mathematically, flat starts would require a rebound in the second half. Now we made no attempt to predict the timing or trajectory of that rebound, but expected that improving consumer confidence, moderating interest rates, and seasonal increases in OSB pricing and demand would be the bellwethers that would signal its approach. And as you are all aware, especially following the conflict in Iran, not only are those market indicators not improving, but they continue to erode. Now while our order files in Siding give us a good bit of visibility into the second quarter, high input costs, falling consumer confidence, and increasing interest rates are magnifying uncertainty about demand in the back half of the year. As a result, we feel it is prudent to temper our expectations for the second half. Current lower levels of market activity anticipate Siding volume declines year over year in the second quarter of about 10%, with sequential improvements through year end. Within this, ExpertFinish is expected to continue to outperform products as we gain share relative to competing prefinished alternatives; therefore expect full-year ExpertFinish volume growth in the mid-single-digits range. List prices should remain very steady, of course. But the very strong price/mix effect of the first quarter is expected to moderate as shed mix increases now that the channel inventory of shed products has normalized. As a result of these volume and price dynamics, we currently expect Siding revenue in the second quarter between $435 million and $445 million and EBITDA between $115 million and $120 million. For the full year, Siding revenue and EBITDA are now expected to be between $1.4 billion and $1.66 billion, with EBITDA between $410 million and $425 million. For OSB, we are applying our normal methodology, assuming prices remain flat from last Friday’s printed level. Unfortunately, Friday’s print included a significant drop in the Southeast and Southwest regions, bringing OSB prices back under EBITDA breakeven levels. As a result, we now expect OSB EBITDA in the second quarter to be a loss of about $10 million. Now we do not plan to merely plod doggedly ahead should these prices persist in an oversupplied market. Again, for modeling purposes, extrapolating current prices forward, the third and fourth quarters would deliver similar results, as reflected in the revised full-year guidance. And finally, while our modeling approach has generally been to assume that Louisiana-Pacific Corporation South America and unallocated corporate expenses net to zero, the economic situation in Chile is similarly depressed and uncertain at the moment, and the soft results in South America are reflected in the total adjusted EBITDA guidance. So in conclusion, housing and general consumer sentiment are not showing the hoped-for signs of recovery yet, and this is most acutely felt in OSB demand and prices. But we remain confident in the SmartSide value proposition and in the long-run ability of our Siding business to gain share in all the segments we serve. And with that, we will be happy to take a round of questions.
Operator: Thank you. We will now open the call for questions. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. In order to accommodate as many individuals as possible for questions, we will allow one question and one follow-up question to be permitted per caller. Please stand by while we prepare the Q&A roster. Our first question comes from the line of George Staphos with Bank of America Securities. Your line is live.
George Staphos: Thanks, Operator. Hi, everyone. Good morning. Thanks for the details. I wanted to ask a point of clarification, maybe as a two-parter for my first question. Alan, I just want to make sure your guidance does not include any assumption on oil pricing per se, correct? If so, can you tell us what the change in oil was relative to your fourth quarter so that we could calibrate somewhat to your adjustment in guidance relative to the cost? The second part of that question is, is there a way to give us pro rata, a change in oil, how much hits percentage-wise on cost of manufacturing in Siding, and how much hits on the freight side?
Alan J. Haughie: Thanks for the question. In reverse order, the cost of manufacturing through the raw materials is a much larger impact than freight. The full annualized impact of freight is relatively small, as detailed. We have more miles of transport in OSB just given the volume, so you can basically anticipate most of the cost hitting on the raw material side and in the manufacturing side. Within that, about 75% of the impact to cost of manufacturing will land in Siding just because of the more raw-material-intensive recipes of Siding relative to OSB. Our guidance makes our best attempt to reflect our current understanding of what the actual annualized impact will be, meaning that we have baked in what we have seen near term in terms of those raw material inputs and also our understanding of the various dynamics of the supply contracts with regard to their pricing algorithms and methodologies. That is about as specific as we are going to get on that rather than diving too deep into the nuts and bolts of those individual contracts. So short answer, yes, the guidance for margins does reflect our outlook of what we are seeing in the market and what we anticipate seeing in the back half of the year. And if prices go significantly higher or lower, you have the sensitivities to give it some Kentucky windage.
George Staphos: Okay. The second question is on the 100 million square feet of Siding across the 15 of the top 25 builders. Is that the 2026 actual volume that you expect, or is that a run rate? And what was the base in 2025, if you could share that? Thank you very much.
Jason Ringblom: I will touch on that, George. The 100 million feet that we specified is, in fact, where we think we will land in 2026. Obviously, with the wins that we have communicated in recent calls, the prior-year volumes were lower. What I would say about the programs—we are not going to give specific names—but each one of these meets a material threshold for us and adds several thousand homes to our portfolio. In both cases, these programs that we talked about really provide us access to new markets where we are underpenetrated, specifically in the Southeast and Southwest markets. Because of that, it is allowing builders and contractors to experience the benefits of using SmartSide, in many cases for the first time with respect to installers.
George Staphos: Is there any way to size that—a one-third increase, a 25% increase, a 2% increase? Any granularity would be helpful, and thanks, good luck in the quarter.
Jason Ringblom: I would say it is above 10%.
Operator: Our next question comes from the line of Michael Andrew Roxland of Truist Securities. Your line is live.
Michael Andrew Roxland: Thank you, Jason, Alan, and Aaron, for taking my questions. One quick one. I believe the gap between vinyl and engineered wood Siding has narrowed. Vinyl—you are seeing increases due to oil. I think there has been a price increase announced for May, 3% to 8% in most products. So where does the price spread currently stand between vinyl and engineered wood, and how does that compare to, let us say, three or six months ago? Have you seen any switching to engineered wood or, even if not switching itself, indications of interest to switch to engineered wood as a result of this narrowing spread?
Jason Ringblom: Mike, I will touch on that. As you noted, we are hearing from our customers that there are some manufacturers going up on the vinyl side; that just makes SmartSide more attractive with regard to that specific comparison. That is something we are keeping a close eye on. But I think most of that has taken place over the course of the last 30 days, essentially. So we have not felt anything material in our order file as it relates to some of the changes in pricing dynamics in the market.
Michael Andrew Roxland: Got it. So in terms of your customers themselves, nothing in your order file just yet, but indications that there could be increased orders or better demand should this spread continue to narrow?
Jason Ringblom: Yes. I think anytime that spread narrows, it presents an opportunity, and we are positioned well to capitalize on that. We like the narrowing of that spread, and we will take advantage of it where we can.
Michael Andrew Roxland: One quick follow-up, Jason. Where does that spread currently stand relative to three months ago, six months ago?
Jason Ringblom: It is tough to really put your finger on that. What we are hearing is price increases in the neighborhood of 6% to 12%, depending on who it is. So the spread has narrowed by that much.
Michael Andrew Roxland: One last one, and I will turn it over. Any update on the potential conversion at Maniwaki?
Jason Ringblom: I can touch on that, Mike. As of today, we have, roughly speaking, about 400 million to 500 million square feet of capacity to support our growth on the primed side. We have explained our options for expansion on prior calls, so I will not get into that. But the engineering work continues on a couple of different paths, including Maniwaki. Nothing new there to share, but I would expect we will be in a position to share more information in the coming quarters.
Operator: One moment for our next question. Thank you. Our next question comes from the line of Anika Dholakia. Your line is live.
Anika Dholakia: Good morning. You have Anika Dholakia on for Matt today. Thank you for taking my questions. First, staying on capacity—even if volumes come in softer than expected, our understanding is that the Green Bay line would still support margin expansion given its higher efficiency. Do you have a sense of the magnitude of the potential margin benefit if this were the case? And how is that contemplated in the guidance?
Alan J. Haughie: Yes, thanks, Anika. Good question. It is contemplated, but the margin benefit really accrues to us more when the facility is fully ramped up. Early in its ramp-up, which is where we are now, that effect is less pronounced, both by virtue of lower efficiency in the early days of operations and the smaller amount of volume as it goes through. Very roughly speaking, if you think about the margin improvement for ExpertFinish as being on a similar trajectory that it was last year, I think that puts you in the right ballpark. As we get more volume through that facility, we will really be able to see the effect of that efficiency and get more specific about its actual effect in subsequent quarters. We will certainly bleat about it as and when it happens.
Anika Dholakia: Okay. Great. That is really helpful. Second, back to the new construction opportunity—when we think about the Siding volume at the 15 of the top 25 builders, where can this high-single-digit number get to as we think of a more normalized starts environment? And then more broadly, longer term, for your new construction strategy, how are you growing in that channel? Is it more growing wallet share, or is it building up the number of builder partnerships?
Jason Ringblom: Appreciate the question. In the new construction segment, specifically with the top 25 builders, we still have a relatively small share position—in the high single digits, as we noted earlier—so there is a ton of opportunity there. At the end of the day, we are trying to be very disciplined and strategic in terms of where we leverage these enterprise programs. It is really about getting access to markets where we are historically underpenetrated, building a stocking dealer base around those programs, and then building our business around some of those wins. In terms of the growth opportunity, at high single digits, the opportunity is very significant for us, and that will be the focus going forward.
Operator: One moment for our next question. Our next question comes from the line of Ketan Mamtora of BMO Capital Markets. Your line is now open.
Ketan Mamtora: Maybe just coming back to the full-year Siding guidance. Backing into the numbers, it feels like the guide is $32 million below what you all had talked about at the midpoint of guidance. But Q1 was a solid beat—about $18 million higher. It almost feels like a $50 million swing for the remaining three quarters. Can you highlight two or three key points that would help us think about the key pieces here?
Alan J. Haughie: Sure, Ketan. The drop in guidance—it is about a $50 million drop from the midpoint. High level, you have to assume that the majority of this reduction is volume related. Call it $70 million of volume, which comes through at a 50% variable margin. So that accounts for about $35 million. There is then about $15 million to $20 million of impacts from oil in the back half of the year, concentrated more in the second half than in the second quarter. So that $50 million is roughly $35 million from volume and the balance from oil-based costs.
Ketan Mamtora: Perfect. This is very helpful. And then, Jason, you talked about expanding the dealer network. There was a recent partnership with Sherwood Lumber on the East Coast. Can you talk about how you are thinking about your existing distribution partnerships—how you are thinking about them, those relationships, and where you have opportunity to penetrate more?
Jason Ringblom: Appreciate the question, Ketan. We have really good access to market through our traditional two-step distributors. Typically, in most markets, we have two distributors; in some, there might be overlap where we have three. Those two-steppers provide supply to many of the pro dealers and one-steppers. That is where our access to market could be improved in some regions and really is the focal point of our enterprise program strategy—to build out that pull-through demand in underpenetrated markets so we can build our stocking dealer network with those pro dealers, one-steppers, etc., to grow our business with contractors and builders beyond those programs.
Operator: Thank you. Our next question comes from the line of Steven Ramsey with Humphrey. Your line is live.
Steven Ramsey: Hi. Good morning. I wanted to think about the cross-selling to builders. Clearly it seems like success winning share with builders. Can you parse out how much of that is success cross-selling OSB and Siding, or is this pure Siding wins?
Jason Ringblom: Thanks for the question, Steven. It is both. I believe that the integration of our two businesses that occurred roughly a year ago at Louisiana-Pacific Corporation is allowing us to be more creative, more flexible, and more responsive when it comes to addressing the needs of our customers. These programs are not cookie-cutter in nature. They are tailored to meet the needs of each respective customer. We are in the early stages. We have one of the most robust portfolios of products or solutions in the industry, and we are in a unique position to leverage that to drive value for targets in the marketplace.
Steven Ramsey: Looking at Siding, it seems like the implied second-half margin is a bit lower than the first half. How much of that is more builder series from these builder wins, or higher ExpertFinish volume, which I know is a mix negative for margin even though it is on an upward trajectory itself? Can you talk through the second-half dynamics of Siding margin?
Jason Ringblom: Steven, I would say both of those factors are relatively small compared to the overall volume decline and the raw material price increases that Alan mentioned earlier.
Operator: Our next question will come from Sean Steuart from TD Cowen. Your line is open.
Sean Steuart: Thanks. Good morning, everyone. A couple of questions. The $200 million earmarked for strategic growth capex—that was consistent quarter over quarter. Can you remind us how much of that is ExpertFinish growth and how much, if any, would be earmarked for Maniwaki work, presuming you advance that project? Is any of that total earmarked for that project?
Alan J. Haughie: There is close to $100 million in here for ExpertFinish expansion. Not all of it is the new mill—some of it is the New York upgrade and completion of the New York facility. So about $100 million there. There is $20 million to $30 million on the next major Siding mill. Call it $130 million of Siding capacity expansion—about three-quarters of it is ExpertFinish.
Sean Steuart: Thanks for that. And then, Alan, you touched on the log inventory build in Q1, which I guess is Canada and the Northern U.S. That seemed to be a bit larger than normal. Can you go into some of the factors there and how we should think about the unwind through the remainder of the year?
Alan J. Haughie: The unwind will be just the normal course of consumption. We did do some forward logging as oil prices rose, and I am very pleased with the efforts of the team to get ahead of some of the freight costs, because once we get the spring breakup, there is very little we can do. So we got a little bit ahead of it. The majority of the remainder is in anticipation of Siding maintenance projects that mean we need to get a little bit ahead on finished goods as well. It is actually a piece of cost mitigation that really triggered it.
Operator: Our next question will come from Kurt Willem Yinger from D.A. Davidson. Your line is open.
Kurt Willem Yinger: I wanted to unpack the full-year Siding sales outlook. By my math, it is a high-single-digit decline in volume. I think maybe a couple of points of that would have been the destock in Q1. How does that underlying mid-single-digit volume decline compare to what you are expecting from the overall market, and what should we infer from that in terms of market share expectations?
Alan J. Haughie: High level, we think we are going to perform relatively well as in growth in both off-site and ExpertFinish—this is fundamentally gaining market share. The rest of the product lines—everything that is not off-site and ExpertFinish—is going to be down high teens. That is where you see the greatest impact of the underlying weak market. So assume off-site and ExpertFinish are going to have modest growth, and high-teens decline in everything else. That is the shape we see emerging.
Kurt Willem Yinger: Got it. On ExpertFinish, the flattish volumes in Q1 and the mid-single-digit outlook for the year—is that a function of capacity constraints, or how do we unpack that deceleration versus what we saw last year?
Jason Ringblom: We are still dealing with a little bit of the ExpertFinish allocation hangover, if you want to call it that. We came off allocation in February, and now that we have visibility into channel inventories, we have noticed that they are a little bit higher than where we would like them to be, which is not uncommon when you come off a managed order file. We believe the first half is going to be a little bit weaker than the second half, due to our channel partners bleeding down inventories to more normal levels.
Operator: Our next question will come from Mark Adam Weintraub from Seaport Research Partners. Your line is open.
Mark Adam Weintraub: Just wanted to follow up on the last question. Alan, you mentioned for primed and for some of the other businesses some growth, but down in the mid- to high-teens in some of the other businesses. Is that because customers, in part, are moving from the businesses where you see yourselves being down mid- to high-teens into the areas where you are flat or growing, or are there two different dynamics going on here?
Jason Ringblom: The biggest dynamic we were dealing with—though we are mostly through it—was related to the shed segment and how much inventory carried over into the new year. I would say we are 85% of the way through that; there is still a little bit of excess inventory there. We have really good visibility into our order file for Q2, but beyond that, there is a tremendous amount of uncertainty looking into the back half of the year. We feel good about what we are doing in the new construction segment and feel like we can outpace housing starts in that segment. In repair and remodel, ExpertFinish being up mid-single digits will be reflective of a better performance than the R&R segment as a whole.
Mark Adam Weintraub: So it sounds like it is really shed where the source of relative performance is going to be soft this year versus your historical algorithms against overall market growth. Is that fair?
Jason Ringblom: Yes, I agree with that. We pay close attention to sell-through rates in that segment. We get data from our distributors, and we are pleased to see that those sell-through rates have held up quite well. So it is really just an inventory dynamic that is playing out in 2026.
Mark Adam Weintraub: One last real quick one—Maniwaki. Can you remind us, is that particularly well positioned if growth in primed continues to be a main focus, or not necessarily?
Jason Ringblom: Maniwaki is certainly an option for us. If we went that direction, it would be the largest OSB plant that we have converted to Siding. It would end up being our largest primed Siding facility. We are still assessing all of our options and are pursuing parallel paths in some cases.
Operator: Our next question comes from Susan Marie Maklari from Goldman Sachs. Your line is live.
Susan Marie Maklari: My first question is on the Siding side of the business. Can you talk about how you are thinking of price elasticity, and within the mid-single-digit growth you are expecting in ExpertFinish, how much of that is the underlying strength of the consumer relative to your share gains and some of those new products that are gaining momentum?
Jason Ringblom: Thanks for the question, Susan. Looking at price elasticity, if you look back at our history, we typically implement a price increase one time annually. There may be a few times in our history—COVID being one—where we had a second price increase. We monitor both raw materials and broader competitive dynamics to determine where we need to position pricing. In the current environment, we are taking a wait-and-see approach, no different than our approach to tariffs last year. We do not want to make a knee-jerk decision due to what could be short-term circumstances in raw material pricing. Our focus is on playing the long game and being as consistent and predictable as possible for our customers amidst all the factors impacting our pricing decisions for Siding. We are pleased with what we realized in terms of the annual price increase that Alan spoke to earlier, and right now we are holding steady.
Susan Marie Maklari: Shifting gears to OSB, can you talk about your plans for production there? Do you still expect that the industry will see capacity come online this year, or has the housing backdrop perhaps changed those plans? Could we see something shift in terms of OSB as we move through the balance of 2026?
Jason Ringblom: Your guess is as good as mine in terms of new capacity coming online. I can speak to one of our competitors taking out a plant—or plants—coming offline as we speak right now in Western Canada. As it relates to OSB at Louisiana-Pacific Corporation, our strategy has not changed. We are proud of the way our team is navigating the current OSB environment—focused on operating with discipline and agility. Over time we have proven our ability to manage and control costs and continue to improve OEE and efficiency. It is a cyclical business, but I am confident that we will be ready to take advantage of the next upward step in the cycle whenever demand improves.
Operator: And our next question will come from Adam Baumgarten from Vertical Partners. Your line is open.
Adam Baumgarten: Hey, everyone. Good morning. Can we get some color on how Siding sell-through trended throughout 1Q and into 2Q so far? Any major change in trend?
Jason Ringblom: We get data from our distributors on sell-through rates. We talked a lot about the inventory build from Q4 to Q1, and that Q1 would look a little bit weaker due to the amount of inventory that was held at the two-step level. That ended up being largely true, and most of that inventory, as mentioned earlier, has been depleted. Sell-through rates have more or less mirrored what we saw this time last year, just down slightly as it relates to the underlying market conditions in the new residential construction segment. No concerning trends at this point. We are seeing the normal seasonal uptick in those rates and are hopeful that will continue.
Adam Baumgarten: Thanks. We were chatting at the Builder Show—there was some commentary around being pleasantly surprised about the interest in ExpertFinish from some of the builders. Did that play any role in the partnerships that you mentioned?
Jason Ringblom: It is playing more of a role than ever, but it is still a relatively small percentage of the business that is bundled in these programs. There is a macro trend in our favor. Labor is tight and expensive. Builders are focused on job site cycle times, and I think all of that plays into our favor as it relates to ExpertFinish and the new ExpertFinish Naturals two-tone line. We believe that will be a trend that continues, and it is why we are investing more in Green Bay, Bath, and North Branch, Minnesota, going forward.
Operator: Thank you. I am showing no further questions from our phone lines. I would now like to turn the conference back over to Aaron Howald for any closing remarks.
Aaron Howald: Thanks, everyone. With no further questions, we will bring the call to a close there. As usual, we will be available for follow-ups. Stay safe, and we will look forward to connecting again in the next quarter. Thank you.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone, have a wonderful day.