Financial Data and Key Metrics Changes - The company reported siding revenue growth of 11% year-over-year, resulting in $755 million in sales and $142 million in EBITDA for the quarter [7][19] - Adjusted earnings per share for the quarter were $0.99, reflecting strong operational efficiency [7][19] - Operating cash flow was $162 million, supported by seasonal reductions in working capital [18] Business Line Data and Key Metrics Changes - The Siding segment achieved record volume, revenue, and EBITDA despite a challenging market, with a 2% price increase and an 8% volume increase contributing to revenue growth [13][19] - The OSB segment faced significant challenges due to falling commodity prices, resulting in an EBITDA of $19 million, which was better than expected due to cost control measures [16][20] Market Data and Key Metrics Changes - Housing starts remain below long-term average demand levels, contributing to a cautious sentiment among contractors [6] - Current OSB prices are at multiyear lows, with adjusted prices being the lowest in at least twenty years when accounting for inflation [19][20] Company Strategy and Development Direction - The company is focused on maintaining growth in the Siding segment through product innovation and market share gains, particularly with the SmartSide product line [9][19] - The company plans to invest in new siding press capacity and increased prefinishing capabilities to support growth [18] - Cost control measures are being emphasized in the OSB segment to navigate the current market challenges [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the Siding segment, despite current market challenges [9][19] - The outlook for the OSB segment remains cautious, with expectations of negative EBITDA in the upcoming quarters if current pricing trends continue [20] Other Important Information - The company was recognized for its safety culture, being named the safest company in 2024 by APA for the third consecutive year [10] - The company has $1.1 billion in liquidity, including $333 million in cash, positioning it well for future investments [18] Q&A Session Summary Question: Insights on Siding margin decrement in Q3 - Management acknowledged that Q3 might not reach the peak of Q2, but combined revenue growth for Q2 and Q3 is expected to be healthy at about 7% year-over-year [26] Question: Early trends in Q3 and CapEx implications - Management noted a slight weakening in the Q3 order file but maintained guidance for the quarter, with most CapEx reductions occurring in the OSB segment [30][29] Question: Cost control measures in OSB - Management highlighted outstanding operational efficiency and aggressive cost containment as key drivers for better-than-expected EBITDA in the OSB segment [38] Question: Impact of shrinking home sizes on siding - Management believes that despite shrinking home sizes, the low penetration rate of wood strand-based siding and potential for a residing cycle will offset any negative impacts [40] Question: Siding guidance for the back half of the year - Management indicated a seasonal pattern with expectations for healthy volume growth in Q4, despite a flat outlook for Q3 [44] Question: Operating rates in Q2 - Operating rates were in the mid-eighty percent range for OSB and slightly lower for Siding as new capacity ramps up [46] Question: Sell-through and channel inventories for Siding - Management reported good sell-through in Q2, with channel inventories positioned as expected, supporting confidence in growth for Q4 [52] Question: Mix impact on pricing - Management clarified that the pricing dynamics are more influenced by product mix rather than headwinds, with panels being lower-priced but high-margin products [70] Question: New residential market opportunities - Management sees opportunities for growth in the new residential market, particularly in converting from vinyl to engineered wood siding [85] Question: Manufactured housing and shed demand - Management noted that shed demand has returned to normal levels post-COVID, while manufactured housing presents a significant growth opportunity due to affordability challenges [94]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $724 million, flat compared to the prior year, as 11% growth in Siding offset lower OSB prices [8][9] - EBITDA decreased by $20 million, primarily due to lower OSB prices impacting overall performance [9][20] - The Siding business achieved a 26% EBITDA margin in Q1, with expectations for similar performance in Q2 [10][22] Business Line Data and Key Metrics Changes - Siding revenue grew by 11% due to 9% higher volumes and 2% higher prices, outperforming single-family starts by 15 points [16] - OSB revenue and EBITDA were negatively impacted by lower commodity prices, resulting in a $32 million reduction in revenue and $13 million in EBITDA [20] - The Expert Finish product line set records for both volume and revenue in Q1, contributing positively to the overall Siding growth [18][86] Market Data and Key Metrics Changes - Single-family starts fell by 6% in Q1 due to economic volatility and unfavorable weather conditions [7] - The Siding order file remains robust, with expectations for a record second quarter [8][22] - Tariff impacts on EBITDA were approximately $2 million for Siding in Q1, with an anticipated $12 million impact for the full year if current tariffs persist [12][23] Company Strategy and Development Direction - The company is focused on expanding its Siding business and introducing specialized products to drive growth and margin expansion [10][14] - There is a strategic emphasis on product innovation and market share gains, particularly in the repair and remodel sector [50][56] - The company maintains a strong liquidity position with $1 billion available, allowing for flexibility in operations and potential tariff impacts [14][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Siding business despite macroeconomic challenges, noting strong order files and growth potential [15][24] - The company anticipates year-over-year revenue growth of 9% to 10% for Siding, with EBITDA margins around 26% [22][23] - Management remains cautious about OSB pricing and market dynamics, indicating a conservative approach to forecasting [22][66] Other Important Information - The company has expanded its revolving credit facility to $750 million, which remains undrawn [21] - New product launches, such as the Naturals Collection, have received positive customer feedback and are expected to contribute to future growth [11][52] Q&A Session Summary Question: Key drivers for Siding outperformance - Management noted strength across the entire order file, particularly in shed orders and the R&R sector, contributing to strong performance [26][28] Question: Inventory levels in the channel - Management indicated that home center inventories were normalizing, with seasonal levels appropriate for the spring [30][32] Question: Siding margin progression - Management expects some margin expansion in the second half of the year, with no significant inflationary impacts materializing [40][41] Question: OSB capacity and market dynamics - Management remains bullish on OSB long-term but acknowledges current market pressures due to excess capacity and weak demand [45][46] Question: Marketing investments and order file success - Management highlighted ongoing investments in marketing and product development as key drivers for order file strength [50][52] Question: Impact of competitor mergers on market share - Management expressed confidence in their market position and ongoing efforts to gain share, regardless of competitor activities [87][100] Question: Future growth in new residential market share - Management indicated a focus on gaining market share with larger builders, with growth expected to be incremental and program-based [108][111]