Core Insights - Quality investments tend to outperform over time, but the duration for this to materialize can be prolonged, particularly for investors in weak industries [1] Group 1 - The article discusses the challenges faced by investors holding quality companies in underperforming sectors [1]

Despite those conditions, Ringblom said LP’s Siding business grew revenue 8% for the full year and expanded margins, helped by strength in the shed segment and growth in the company’s ExpertFinish offering. He also highlighted operational and commercial changes from reorganizing under a chief commercial officer and chief operating officer structure, which he said improved synergy between the OSB and Siding go-to-market approach and enhanced best-practice sharing in operations.Chief Executive Officer Jason R ...

Financial Performance - In 2025, net sales totaled $2,708 million, a decrease of 7.9% from $2,941 million in 2024[220]. - Net income for 2025 was $146 million, a significant decline of 65.2% compared to $420 million in 2024[220]. - Adjusted EBITDA decreased by $292 million due to lower OSB prices and reduced sales volumes, partially offset by $91 million from higher Siding sales volumes and improved sales mix[152]. - Gross profit for 2025 was $589 million, down from $832 million in 2024, reflecting a gross margin of 21.8%[220]. - Cash generated from operations was $382 million in 2025, down from $605 million in 2024, attributed to lower net income[189]. - The effective tax provision decreased to $50 million in 2025 from $140 million in 2024, reflecting changes in state and foreign income taxes[184]. - The company incurred $8 million in expenses related to new or increased tariffs for the year ended December 31, 2025[85]. - The company recorded $44 million in non-cash, pre-tax impairment charges during 2025, compared to $5 million in 2024[181]. Sales and Market Trends - The Siding segment reported net sales of $1,689 million for 2025, an 8% increase from $1,558 million in 2024, with Adjusted EBITDA rising 14% to $444 million[174]. - The OSB segment experienced a significant decline, with net sales dropping 30% to $832 million in 2025, and Adjusted EBITDA plummeting 98% to $7 million[176]. - The global siding market is estimated to be approximately $120 billion annually, with the company being the largest manufacturer of engineered wood siding in North America and South America[158]. - Housing starts in the U.S. for single-family homes were reported at 949,000 for the year ended December 31, 2025, a decrease from 1,013,000 in 2024[62]. - The U.S. Census Bureau reported that actual single-family housing starts in 2025 were 6% lower than in 2024, while multi-family housing starts increased by about 18%[153]. Production and Capacity - The company has significant production capacities, including 4,095 million square feet for OSB and 2,320 million square feet for siding across various facilities[136]. - The company plans to increase production capacity for high-margin Siding products through new plants, conversion of existing OSB plants, and expansion of current facilities[25]. - The company operates more than 20 manufacturing facilities across North and South America, continuously improving operational efficiency as measured by Overall Equipment Effectiveness (OEE)[36]. - The Overall Equipment Effectiveness (OEE) for Siding remained stable at 77% for the years ended December 31, 2025, 2024, and 2023[68]. - The OEE for OSB improved to 79% in 2025 from 78% in 2024, and 75% in 2023, indicating enhanced manufacturing efficiency[68]. Customer and Market Strategy - The company is focused on innovation and customer service to drive value-added sales growth, targeting builders and contractors with a broad array of building products[29]. - The Siding business is expected to continue growing, driven by demand for sustainable engineered wood products, with over 50% of demand coming from markets less sensitive to housing market cyclicality[28]. - In 2025, the top ten customers accounted for approximately 47% of the company's net sales, indicating a broad customer base[35]. - The company is committed to expanding internationally, particularly in South America, to meet the growing demand for wood-based residential construction[33]. - The company emphasizes strategic sourcing to reduce costs and improve efficiency by consolidating purchases across business segments[38]. Employee and Safety Initiatives - As of December 31, 2025, the company employed approximately 4,300 employees, with 2,800 in the United States, 800 in Canada, and 800 in South America[48]. - The Total Incident Rate (TIR) for the year ended December 31, 2025, was 0.62, outperforming the targeted TIR of <1.0, indicating industry-leading safety performance[50]. - The company is focused on talent development, providing resources for continuous career growth to retain top talent[52]. - The company’s commitment to health and wellness includes innovative programs that offer flexibility and security to employees and their families[55]. - The company has established a targeted TIR of <1.0 per year, which reflects its commitment to safety and continuous improvement in health and safety performance[50]. Risks and Challenges - The company is exposed to raw material cost fluctuations, particularly wood fiber, which is subject to commodity pricing and can significantly impact manufacturing costs[98]. - The company is subject to risks associated with potential supply chain disruptions, including delays and cost fluctuations due to international operations[82]. - The company’s reliance on North American new home construction and remodeling makes it vulnerable to fluctuations in the housing market[95]. - Increased competition in the building products industry may hinder the company's ability to sustain or increase net sales and profitability[97]. - The company faces challenges in attracting and retaining qualified employees, which could impact its growth and financial position[76]. - The company’s international operations could be negatively affected by legal and regulatory changes, including tariffs and trade restrictions[84]. - The company’s financial performance may be impacted by climate change and related sustainability expectations from stakeholders[89]. - The company’s cybersecurity measures may not be sufficient to prevent data breaches, which could adversely affect its operations and financial results[79]. - The company’s development and integration of AI technology remain in early phases, potentially exposing it to new costs and risks[80]. Legal and Regulatory Matters - The company is subject to various legal proceedings and environmental matters that could result in substantial costs and liabilities[104]. - Compliance with environmental regulations incurs significant expenditures, and changes in these laws may lead to increased compliance costs or operational restrictions[102]. - The company maintains a compliance program for anti-corruption laws, but violations could lead to significant penalties and impact financial condition[107]. - Regulatory changes, including tax law modifications, could adversely affect the company's financial condition and results of operations[109]. - Development of Canadian forest lands is subject to Indigenous rights, which may restrict wood supply and affect operational costs[101]. Financial Obligations and Capital Management - As of December 31, 2025, the company had no outstanding borrowings under the Amended Credit Facility of $750 million[195]. - The company anticipates continued reliance on its credit facility for long-term funding not provided by operating cash flows[187]. - The company issued 3.625% Senior Notes due in 2029 with an aggregate principal amount of $350 million, with future interest payments totaling $41 million as of December 31, 2025[198]. - Fixed lease payment obligations amounted to $32 million as of December 31, 2025, with $10 million payable within 12 months[200]. - Other purchase obligations related to information technology infrastructure totaled $39 million, with $22 million payable within 12 months[201]. - Contingency reserves for future cash needs totaled $27 million as of December 31, 2025, with $1 million estimated to be payable within one year[199].

Financial Data and Key Metrics Changes - In Q4 2025, the company reported net sales of $567 million, EBITDA of $50 million, and adjusted diluted earnings per share of $0.03 [6][7] - For the full year, net sales reached $2.7 billion, with EBITDA of $436 million and adjusted earnings per share of $2.65 [16][17] - The EBITDA margin for the siding business improved to 26%, up 1 percentage point from 2024 [15] Business Line Data and Key Metrics Changes - The siding business grew by 8% for the full year, with a 4% increase in both net selling prices and sales volumes [7][15] - ExpertFinish saw a significant volume increase of 35% in Q4, while prime volumes declined by 5% [13] - OSB operations faced challenges with a year-over-year revenue decrease of $129 million and EBITDA decline of $95 million due to unfavorable supply-demand dynamics [15] Market Data and Key Metrics Changes - Single-family housing starts were down approximately 10% in Q3 2025, with further weakness expected in Q4 [6] - The company noted a stronger market presence in the Upper Midwest, which helped mitigate impacts from softer markets in the Southeast [9] - OSB prices reached their lowest levels in 20 years, significantly impacting revenue [10] Company Strategy and Development Direction - The company aims to drive growth, gain market share, and deliver product innovation while generating shareholder value [5] - Integration of operations under a chief commercial officer and chief operating officer structure is expected to enhance sales synergies and operational efficiency [11] - The company plans to invest approximately $400 million in capital expenditures for 2026, focusing on sustaining maintenance and strategic growth [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged affordability challenges due to tariffs and economic uncertainty affecting consumer confidence [5] - The company anticipates a difficult first quarter in 2026, with expected volume declines of 15%-20% [20] - Despite current challenges, management remains confident in the long-term growth potential of the SmartSide product line [24] Other Important Information - The company achieved a total incident rate of 0.62 in 2025, earning the APA's Safest Company Award for the third consecutive year [12] - The cash balance at year-end was $292 million, with an undrawn revolver of $750 million, providing over $1 billion in liquidity [17] Q&A Session Summary Question: What factors are influencing siding revenue guidance? - Management expects improvement in shed demand to be the dominant factor, alongside overall housing normalization [27][28] Question: Are there risks of a shift to lower-cost siding materials? - Affordability remains a headwind, with some movement towards vinyl, but the company believes in the value of its SmartSide offerings [29][30] Question: What is the demand outlook for the ExpertFinish product? - Demand remains strong, with macro trends favoring the product, and the company has come off allocation due to operational improvements [33][34] Question: How is the competitive environment in siding evolving? - The company is gaining market share across segments, with a focus on new construction and repair/remodel markets [43][44] Question: What is the outlook for OSB demand and capacity management? - The company is focused on matching supply with demand, with optimism for a rebound in prices and demand as the building season approaches [69][70]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported net sales of $567 million, EBITDA of $50 million, and adjusted diluted earnings per share of $0.03 [6][7] - For the full year, net sales reached $2.7 billion, with EBITDA of $436 million and adjusted earnings per share of $2.65 [16][17] - The EBITDA margin for the siding business improved to 26%, up 1 percentage point from the previous year [15] Business Line Data and Key Metrics Changes - The siding business grew by 8% for the full year, with a 4% increase in net selling prices and a 4% increase in sales volumes [7][15] - ExpertFinish product line saw an impressive 35% growth in Q4, while prime volumes declined by 5% [13] - OSB segment faced significant challenges, resulting in a year-over-year decrease of $129 million in revenue and $95 million in EBITDA due to unfavorable supply-demand dynamics [15] Market Data and Key Metrics Changes - Single-family housing starts were down approximately 10% in Q3 2025, with further weakness expected in Q4 [6][10] - The company noted a stronger market presence in the Upper Midwest, which helped mitigate impacts from softer markets in the Southeast [9] - OSB prices reached their lowest levels in 20 years, significantly impacting the segment's performance [10] Company Strategy and Development Direction - The company is focused on driving growth, gaining market share, and delivering product innovation while managing costs effectively [5][10] - Integration of operations under a chief commercial officer and chief operating officer structure is expected to enhance sales synergies and operational efficiency [11] - Capital investments are being adjusted in response to market conditions, with a focus on sustaining maintenance and strategic growth [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariffs, economic policy uncertainty, and deteriorating consumer confidence affecting housing affordability [5][6] - The company anticipates a difficult first quarter of 2026, with expected declines in total volumes of 15%-20% [20] - Despite current challenges, management remains optimistic about long-term growth potential, particularly in the siding segment [24] Other Important Information - The company achieved a total incident rate of 0.62 in 2025, earning the APA's Safest Company Award for the third consecutive year [12] - The cash balance at year-end was $292 million, with an undrawn revolver of $750 million, providing over $1 billion in liquidity [17] Q&A Session Summary Question: What factors are influencing siding revenue guidance? - Management expects improvement in shed demand to be the dominant factor, alongside overall housing normalization [26][27] Question: Are there risks of a shift to lower-cost siding materials? - Affordability remains a headwind, with some movement towards vinyl, but the company believes in the value of its SmartSide products [28][29] Question: What is the demand outlook for the ExpertFinish product? - Demand remains strong due to macro trends, and the company has come off allocation due to operational improvements [31][32] Question: How is the competitive environment in siding evolving? - The company is confident in gaining market share across segments, despite challenges in the housing market [40][41] Question: What is the outlook for OSB demand and capacity management? - The focus is on matching supply with demand, with optimism for a rebound in pricing due to competitor mill closures [66][67]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported net sales of $567 million, EBITDA of $50 million, and adjusted diluted earnings per share of $0.03 [5][16] - For the full year, net sales reached $2.7 billion, with EBITDA of $436 million and adjusted earnings per share of $2.65 [16] - The EBITDA margin for the siding business improved to 26%, up 1 percentage point from 2024, while the OSB segment faced significant price declines, resulting in a low EBITDA margin [14][16] Business Line Data and Key Metrics Changes - The siding business grew by 8% in 2025, with a 4% increase in net selling prices and a 4% increase in sales volumes [5][16] - ExpertFinish product line saw a remarkable 35% growth in Q4, while prime volumes declined by 5% [12] - OSB segment faced a revenue decrease of $129 million and EBITDA decline of $95 million due to unfavorable supply-demand dynamics [14] Market Data and Key Metrics Changes - Single-family housing starts were down approximately 10% in Q3 2025, with further weakness expected in Q4 [5] - The company noted a stronger market presence in the Upper Midwest, while being modestly insulated from softer markets in the Southeast [7] - OSB prices reached their lowest levels in 20 years, significantly impacting the segment's performance [9] Company Strategy and Development Direction - The company aims to drive growth, gain market share, and deliver product innovation while generating shareholder value [4] - Integration of operations under a chief commercial officer and chief operating officer structure is expected to enhance sales synergies and operational efficiency [10] - The company plans to invest approximately $400 million in capital expenditures for 2026, focusing on sustaining maintenance and strategic growth [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged affordability challenges due to tariffs, economic policy uncertainty, and deteriorating consumer confidence [4] - The company anticipates a difficult first quarter in 2026, with expected volume declines of 15%-20% and a weaker order file [20] - Despite current challenges, management remains confident in the long-term growth potential of the SmartSide product line and its market share gains [23] Other Important Information - The company achieved a total incident rate of 0.62 in 2025, earning the APA's Safest Company Award for the third consecutive year [11] - The company has over $1 billion in liquidity, with a cash balance of $292 million and an undrawn revolver of $750 million [17] Q&A Session Summary Question: What factors are influencing LP siding revenue guidance? - Management expects improvement in shed demand to be the dominant factor, alongside overall housing normalization [26][27] Question: Are there risks of a shift to lower-cost siding materials? - Affordability remains a headwind, with some movement towards vinyl, but the company believes in the value of its SmartSide offerings [28][29] Question: What is the demand outlook for the ExpertFinish product? - ExpertFinish continues to outperform due to macro trends, and the company has come off allocation due to operational improvements [31][32] Question: How is the competitive environment in siding evolving? - The company is gaining share across segments and remains optimistic about opportunities in new construction and repair remodel [40][41] Question: What is the outlook for OSB demand and capacity management? - The company is focused on matching supply with demand and is optimistic about a favorable pricing environment due to competitor mill closures [67]

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...

February 17, 2026 FORWARD-LOOKING STATEMENTS This presentation contains statements concerning Louisiana-Pacific Corporation's (LP) future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and assumptions of, and on information available to, our management; assumptions upon which such forward-looking statements are based are also forward-looking statements. Forward looking ...

Core Viewpoint - Louisiana-Pacific (LPX) reported quarterly earnings of $0.03 per share, surpassing the Zacks Consensus Estimate of a loss of $0.06 per share, but down from $1.03 per share a year ago, indicating a significant earnings surprise of +148.00% [1] Financial Performance - The company posted revenues of $567 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 6.02%, and down from $681 million year-over-year [2] - Over the last four quarters, Louisiana-Pacific has exceeded consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - Louisiana-Pacific shares have increased by approximately 15.9% since the beginning of the year, contrasting with a 0.1% decline in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.60 on revenues of $665.25 million, and for the current fiscal year, it is $3.19 on revenues of $2.93 billion [7] - The trend of earnings estimate revisions for Louisiana-Pacific was mixed ahead of the earnings release, which may change following the recent report [6] Industry Context - The Building Products - Wood industry, to which Louisiana-Pacific belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Louisiana-Pacific's stock may be influenced by the overall outlook for the industry [8]

Sales Performance - Siding net sales increased by $23 million, or 6%, to $384 million in Q4 2025, while consolidated net sales decreased by $114 million to $567 million [5]. - For the full year 2025, net sales dropped by $233 million to $2.7 billion, with siding revenue increasing by $131 million, or 8%, to $1.7 billion [11]. - OSB net sales decreased by $132 million to $136 million in Q4 2025, driven by lower prices and sales volumes [9]. - Net sales for Q4 2025 were $567 million, down 16.7% from $681 million in Q4 2024 [24]. - Total sales for Q4 2025 were $567 million, down from $681 million in Q4 2024, with Siding sales increasing to $384 million from $362 million [33]. Profitability - The company reported a net loss of $8 million in Q4 2025, a decrease of $70 million year-over-year, with adjusted EBITDA down by $74 million to $50 million [10]. - Full year net income declined by $275 million to $146 million, with adjusted EBITDA decreasing by $252 million to $436 million [12]. - Gross profit for Q4 2025 was $85 million, a decrease of 47.5% compared to $162 million in Q4 2024 [24]. - Net income for the year ended December 31, 2025, was $146 million, down 65.2% from $420 million in 2024 [24]. - Adjusted EBITDA for Q4 2025 was $50 million, significantly lower than $125 million in Q4 2024 [34]. - Adjusted diluted EPS for the year ended December 31, 2025, was $2.65, down from $5.88 in 2024 [34]. Future Projections - The company expects Q1 2026 siding net sales to be approximately $350-355 million, representing a 12% decline year-over-year [6]. - For full year 2026, siding net sales are projected to be around $1.7 billion, indicating a 2% growth [6]. Expenses and Cash Flow - Selling, general, and administrative expenses increased to $79 million in Q4 2025 from $76 million in Q4 2024 [24]. - Cash provided by operating activities for the year ended December 31, 2025, was $382 million, down from $605 million in 2024 [26]. - Cash, cash equivalents, and restricted cash at the end of Q4 2025 were $292 million, a decrease from $340 million at the end of Q4 2024 [26]. - The company incurred $13 million in impairment of goodwill and long-lived assets in Q4 2025, compared to $5 million in Q4 2024 [26]. Capital and Liquidity - Capital expenditures for 2025 were $291 million, with an expected increase to approximately $400 million for 2026 [5][6]. - Total liquidity as of December 31, 2025, was approximately $1 billion [5]. - Long-term debt remained stable at $348 million for both 2025 and 2024 [25]. - Stockholders' equity rose to $1,731 million in 2025, up from $1,671 million in 2024, indicating a growth of 3.6% [25]. - Total assets increased to $2,627 million in 2025 from $2,556 million in 2024, representing a growth of 2.8% [25]. Market Conditions - U.S. housing starts for single-family homes decreased to 221,000 in Q4 2025 from 231,000 in Q4 2024, while multi-family starts increased to 97,000 from 91,000 [29]. - OSB sales volume decreased to 616 MMSF in Q4 2025 from 827 MMSF in Q4 2024, reflecting a decline in both structural and commodity segments [30]. Operational Efficiency - Overall Equipment Effectiveness (OEE) for Siding improved to 78% in Q4 2025 from 75% in Q4 2024, while OSB increased to 80% from 78% [32]. Non-GAAP Measures - The company highlighted the importance of non-GAAP measures like Adjusted Income and Adjusted Diluted EPS for evaluating performance [22]. - Adjusted EBITDA is reported as a key performance measure, reflecting the company's operational performance [22].