Louisiana-Pacific Corporation

Good day and thank you for standing by. Welcome to the fourth quarter 2025 Louisiana Pacific Corporation earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, we'll open up for questions. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's call is being recorded. I would now like to hand it over to your speaker, Erin Hobold. Vice President, Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone. Thank you for joining us from the International Builder Show in Orlando to discuss LP's financial results for the fourth quarter and full year of 2025, as well as our outlook for 2026. Hosting the call with me this morning are Jason Ringblum, Chief Executive Officer, and Alan Hockey, Chief Financial Officer. After prepared remarks, we will take a round of questions, and then we will be available for follow-up calls and visits to LP's booth at IBS. During this morning's call, we will refer to a presentation that has been posted to LP's IR webpage, which is investor.lpcorp.com. Our 8-K filing, earnings press release, and other materials are also available there. Finally, I will remind you that today's discussion contains forward-looking statements and non-GAAP financial metrics as described on slides two and three of the earnings presentation. The appendix of that presentation also contains reconciliations that are further supplemented by this morning's AK filing. Rather than reading those materials, I will incorporate them herein by reference. And with that, I'll turn the call over to Jason.

Thank you, Aaron, and thank you all for joining us. First of all, let me start by offering thanks and congratulations on behalf of the entire LP team to Brad Southern for a well-earned retirement after more than 25 years of transformative leadership at LP. It's truly an honor to be succeeding Brad as LP's next CEO and I'm confident that LP has the right strategy and the right team to make a seamless transition. We remain fully committed to driving growth, gaining market share, delivering product and process innovation, and generating shareholder value in the years to come. 2025 was a difficult year for home building and aspiring homeowners. Tariffs, economic policy uncertainty, and deteriorating consumer confidence all contributed to affordability challenges. Housing starts decelerated throughout the year. In fact, single family starts, a key demand indicator for both siding and OSB, were down roughly 10% in the third quarter, according to the Census Bureau. Unfortunately, the Census Bureau has yet to publish fourth quarter housing data, but I suspect when that data is available, it will confirm further weakness. Despite these challenges, LP grew the siding business by 8% for the full year while expanding margins, particularly in expert finish. In the fourth quarter, LP delivered $567 million in net sales, $50 million in EBITDA, and $0.03 in adjusted diluted earnings per share. LP's siding business showed resilience in a weakening market For the full year, we achieved 4% higher net selling prices and 4% higher sales volumes, resulting in 8% revenue growth. This allowed us to deliver a 26% EBITDA margin. Major contributors to these results were growth in the shed segment, which reinforces the power of LP's diverse end-use applications, and expert finish, where not only has product innovation helped us expand the addressable market to reach new repair and remodel customers, but as Alan will describe in a few minutes, we have also seen significant margin improvement. 2025 saw significant volume growth with our largest shed customers, particularly in the first half of the year. It's hard to be precise given the broad range of uses for SmartSide lap trim and panels, But we estimate that shed volumes were up slightly more than 20% year-over-year. We estimate that products sold into new residential construction saw volumes decline by roughly one to three points, which significantly outpaced the decline in single-family starts. LP's repair and remodel sector was likely flat to up a point or two, with impressive 18% growth in expert finish. To be fair, siting also enjoyed some geographic advantages in 2025. We had stronger market presence in the upper Midwest, where construction activity remained comparatively strong. And we were modestly insulated from softer markets in the Southeast due to our lower market penetration in this region. One consequence of recent market uncertainty is that dealers adopted a more cautious stance with regard to their inventory positions, holding fewer weeks of supply than normal. This adjustment coincided with a volume allocation prior to LP's price increase that we now realize was somewhat larger than necessary. Unfortunately, the combined effect of these phenomena appears to have resulted in some pull forward at year end. leading to elevated channel inventories with some of our two-step distribution partners. Consequently, and as Alan will detail in the guidance section, siting order files have been a bit weaker than anticipated to begin 2026. OSB results tracked housing demand more closely as they generally do with commodity prices softening alongside housing starts. Unfortunately, at their trough, OSB prices adjusted for inflation to the lowest we've seen in 20 years at LP. Despite that, LP's OSB Mills operated safely and efficiently in the fourth quarter. We managed costs and capacity with care and discipline, and while we did not break even for the quarter, we did overcome softness in the second half of the year to achieve a positive EBITDA for the full year. As you all know, we can't control OSB prices, so we focus our efforts instead on executing our strategy. Speaking of strategic execution, the integration of LP under a chief commercial officer and chief operating officer structure, rather than two business general managers, is also beginning to show its value. For example, aligning OSB and citing go-to-market strategies has enabled unique sales synergies that provide new pathways for ongoing site and growth. Integrating operations has improved best practice sharing, uncovering opportunities for enhanced safety, OEE, and system-wide capacity utilization. Operating efficiency in the OSB business increased by one point to 79%, which is remarkable given the operating challenges of a soft demand environment. While total siting OEE was flat year over year at 77%, OEE at LP's expert finish facilities improved significantly. This not only contributed to our ability to come off of a managed order file a bit earlier than previously anticipated, but as Alan will detail in a moment, the extra volume helped deliver margin expansion. LP also executed our capital investments efficiently and flexibly, adjusting in response to slowing demand and accelerating expert finish expansion to meet strong demand. And most importantly, we operated safely and responsibly. LP achieved a total incident rate of 0.62 in 2025, which was incrementally better than 2024's level. We also had two mills, Newberry, Michigan, in Siding, and Jasper, Texas, in OSB, reach three years without a recordable injury in 2025. As a result, LP earned the APA's Safest Company Award for the third year running. And with that, I'll turn over the call to Alan Hockey for a more detailed review of LP's financial results for the quarter and the year, as well as a discussion of our outlook. after which we will take a round of questions.