Louisiana-Pacific Corporation (NYSE:LPX) Q4 2025 Earnings Call Transcript

Louisiana-Pacific Corporation (NYSE:LPX) Q4 2025 Earnings Call Transcript February 17, 2026

Louisiana-Pacific Corporation misses on earnings expectations. Reported EPS is $-0.24286 EPS, expectations were $-0.06.

Operator: Good day, and thank you for standing by. Welcome to the quarter 2025 Louisiana-Pacific Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, we will open up for questions. To ask a question during the session, you will need to press 11 on your telephone. 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 call is being recorded. I would now like to hand it over to your speaker, Aaron Howald, Vice President, Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone.

Aaron Howald: Thank you for joining us from the International Builders’ Show in Orlando to discuss Louisiana-Pacific Corporation 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 Ringblom, Chief Executive Officer, and Alan J. Haughie, 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 web page 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 2 and 3 of the earnings presentation.

The appendix of that presentation also contains reconciliations and is further supplemented by this morning’s 8-K filing. Rather than reading those materials, I will incorporate them herein by reference. And with that, I will 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 is truly an honor to be succeeding Brad as LP’s next CEO. I am 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 homebuilding 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 $567,000,000 in net sales, $50,000,000 in EBITDA, and $0.03 in adjusted diluted earnings per share.

LP 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. 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 is 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, Siding also enjoyed some geographic advantages in 2025. We have 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 guide section, Siding 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, were the lowest we have 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 cannot 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 beginning to show its value. For example, aligning OSB and Siding go-to-market strategies has enabled unique sales synergies that provide new pathways for ongoing Siding 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 Siding 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. 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. I will now turn the call over to Alan J. Haughie 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.

Alan J. Haughie: Thanks, Jason.

Alan J. Haughie: Slide 7 of the presentation shows the fourth quarter year-over-year waterfall for Siding. Revenue increased by 6% with prices, including mix effects, up 8% on a 2% volume decline.

Aaron Howald: And while these price increases added $24,000,000 to sales and EBITDA year over year,

Alan J. Haughie: some of that benefit came from volume rebate thresholds not being met. But within this modest volume decline, Expert Finish jumped 35% while Prime volumes fell by 5%. This creates a slight adverse mix effect within EBITDA because Expert Finish still has a lower margin than Primed products. Having said that, Expert Finish margins have improved by about eight points year over year thanks to leverage on increased volume and manufacturing efficiencies. The only other items to note for Siding in the fourth quarter chart are the absence of tariffs on the Expert Finish we are importing into Canada, and the non-recurrence of last year’s effects from production and cost timing due to the delayed maintenance project last fall.

As a result, the EBITDA margin for the quarter was 25%, up five points year over year. For the full year on Slide 8, net sales were up 8%, evenly split between price and volume, as Jason said, adding $131,000,000 to revenue and $91,000,000 to EBITDA. Selling and market expenses increased by about $11,000,000 while raw material cost tailwinds mostly offset freight and labor cost headwinds. SG&A increases, tariffs, and other factors totaled about $23,000,000. As a result, Siding finished 2025 with $444,000,000 in EBITDA, which is $54,000,000 higher than 2024, a one percentage point rise in the EBITDA margin to 26%. OSB charts on Pages 9 and 10 are dominated by price, as they so often are, sadly, this time to the negative. In the fourth quarter, unfavorable supply-demand dynamics resulted in multiyear price lows and volume reductions across the OSB portfolio.

Volume and price movements are harder to parse in OSB than they are in Siding given its commodity nature, and they combined for a year-over-year decrease of $129,000,000 in revenue and $95,000,000 in EBITDA. Given these headwinds, the OSB operations team made the best of a very difficult market, found every opportunity for savings and efficiency. Their efforts and diligence allowed the segment to achieve $7,000,000 of EBITDA for the year, as detailed on Slide 10. To summarize the financial results for the full year, we had $2,700,000,000 in net sales, $436,000,000 of EBITDA, and adjusted earnings per share of $2.65. These are the net effect of Siding growth and margin expansion offset by lower OSB prices. As you can see on Slide 11, we consistently executed our capital allocation strategy.

Adjusted EBITDA of $436,000,000 generated $382,000,000 of operating cash flow after $42,000,000 in cash taxes and a small increase in working capital. We invested $291,000,000 in sustaining maintenance and growth capital, and this was about $25,000,000 less than we anticipated spending on the last call, made possible by the deferral of some of the nonessential projects in OSB as well as the decision to slow down capacity investments in Siding. We returned $139,000,000 to investors through $78,000,000 in quarterly dividends and $61,000,000 in share repurchases. At year-end, LP’s cash balance was $292,000,000, and with an undrawn revolver of $750,000,000, LP has over $1,000,000,000 in liquidity. For housekeeping, we have $177,000,000 of Board authorization remaining to repurchase shares.

Guidance: LP’s OSB guidance is algorithmic and relatively straightforward, so let me dispense with that first. Random Lengths prices have climbed recently to levels that are near enough to OSB breakeven that, should we extrapolate current prices for the full year, OSB results will be very similar to 2025. I should also note, for sensitivity modeling purposes, we currently anticipate LP’s utilization rate for OSB to be a few points below our longer-term average rate of 85%. For 2026, LP’s realization has lagged the rising market price, which is typical. Assuming prices hold at current levels, OSB EBITDA in the first quarter should be a loss of between $25,000,000 and $30,000,000. Unlike OSB, our Siding guidance is not algorithmic. Rather, it is informed in the near term by our order file and in the longer term by macroeconomic data and customer sentiment.

As Jason said in his remarks, an acute lack of data, particularly housing starts, added uncertainties to our planning for volume allocations following the announcement of our 2026 price increase last October. Despite our best intentions, we overshot, resulting in some pull-forward of demand from the first quarter of this year into the fourth quarter of last year, especially with our shed customers. To be fair, it is difficult to precisely separate this impact from that of a severe winter storm that hit the Southeast in late January. Suffice to say, as a result, our order file is weaker today and inventories are higher. So far in the first quarter, our order files contain significantly weaker shed activity than we experienced this time last year, with demand in the new residential construction and repair and remodel sectors roughly in line with the year-over-year decline in single-family housing starts but exacerbated by our current inventory position.

Accordingly, we currently anticipate total volumes in the first quarter will be down 15% to 20%, with shed volumes down 25% to 30%, new residential construction and R&R volumes down about 10% to 15%, consistent with single-family starts. However, we expect average selling prices in the first quarter to be up six to eight points as a result of list price increases and the positive mix effect of ongoing Expert Finish growth. This would result in a first quarter year-over-year decline in net sales of 11% to 13%, with the EBITDA margin coming in at between 23% and 25%. Given the exit rate from Q4 of last year, flat housing consensus for 2026 implies meaningful improvement after a difficult first quarter. Presuming the consensus is correct, and starts do indeed end the year flat to 2025, we would expect to see demand improve sequentially, especially as shed demand returns to prior-year cadence as inventories normalize.

As such, by year-end, we would expect Siding volumes to be down low single digits, selling prices to be up mid-single digits, and, as a result, net sales to be up low single digits, for an EBITDA margin of around 25% to 26%. With regard to capital expenditures, consistent with the same general market assumptions I just mentioned, we currently anticipate investing about $400,000,000 split equally between sustaining maintenance and strategic growth. The spending will probably be back-end loaded with about percent of the investments occurring in the second half. Should the market demand environment diverge meaningfully, for better or worse, we have significant flexibility in our plans such that we could accelerate investments somewhat or reduce them substantially.

As I said a moment ago, LP certainly has the balance sheet to weather further market weakening or support accelerated investment as needed. We are facing a very uncertain market backdrop at the moment. However, rather than dwelling on what we do not know, LP’s teams will focus on what we do know. LP SmartSide has consistently gained share with innovative products that expand the addressable market. That growth, coupled with the pricing power that comes with a premium specialty product, brings leverage and margin expansion. While not linear, that growth has, over time, outperformed the underlying markets we serve. We are confident that these fundamentals remain intact and that we have a long runway ahead of us and the right strategy to guide us.

With that, we will be happy to take a round of questions, after which we look forward to seeing you at LP’s booth at the International Builders’ Show.

Q&A Session

Operator: Thank you. As a reminder, to ask a question, you need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please limit yourself to one question and one follow-up. In the interest of time, please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from the line of Matthew Bouley from Barclays. Your line is now open.

Matthew McKellar: Hi. Good morning. I have Anika Dallacia on for Matt today. Thank you for taking my questions. First off, Brad, congrats, and, Jason, look forward to working with you. First, with 1Q Siding revenue guidance, it implies a step up through the rest of the year to get to $1,700,000,000 guidance, maybe somewhere in the mid-single-digit range. I know you talked about shed normalizing. Is that the main driver you are looking at in the year-over-year comps, or any details around how you are thinking about the cadence of revenues?

Operator: Thanks.

Alan J. Haughie: Yeah. Hi. It is—We are expecting some improvement in shed. That is probably the dominant piece, but really, we are expecting improvement across the board as housing normalizes.

Matthew McKellar: Okay. Got it. I am curious on the affordability pressure today. Are you seeing any risk of mix down to vinyl or other siding materials that have a lower upfront cost? What are you hearing from contractors, and are there any differences by channel, either builder or R&R?

Aaron Howald: Thanks for the question. I would say affordability remains a primary headwind and all the builder customers that we are working with are focused on meeting a price point that will allow them to turn more homes. There has been a little bit of a move to vinyl, but we think with the broad product offering that we offer with SmartSide that there is tremendous value there, and with a relatively low share position there are plenty of opportunities for us to continue on our growth trajectory.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Ketan Mamtora from BMO Capital Markets. Your line is open. Good morning, and thanks for taking my question. Coming back to Siding, Jason, can you talk a little bit about what you are seeing

Ketan Mamtora: in terms of demand in your Expert Finish product? I saw volumes were pretty good in Q4. Are you still in allocation on that business? Any trends you can talk to?

Aaron Howald: Thanks, Ketan. Appreciate the question. In regards to Expert Finish, what I would say is macro trends remain in our favor here. Labor is tight. Labor is expensive. Homeowners expect a durable and resilient solution that comes with a warranty. Our value proposition for Expert Finish and Expert Finish Naturals really addresses all of those needs. As a result, we are continuing to see this product category outperform in both new construction and repair and remodel. In regards to the allocation question, we did come off allocation, I believe, February 1, so a couple of weeks ago. That is due to the OEE improvements that we were able to realize across our network. We thought that we would have to wait until our new Green Bay facility came online in early Q2 of this year, but through great work from our operations folks, we have been able to come off slightly in advance of what we had planned on.

Ketan Mamtora: Understood. That is helpful. Can you remind us how you are thinking about additional capacity in Siding? Last quarter, you talked about it as being one of the options. How should we think about timeline on that? In the meantime, how are you thinking about managing production in OSB?

Aaron Howald: I will start with Siding and say we are very excited to be ramping up our new 70,000,000-foot line in Green Bay in early Q2. Regarding broader capacity expansion opportunities, we are continuing detailed engineering work for future Expert Finish and Primed capacity expansion projects. Some of that capital spend is in the figures that Alan shared earlier, a little more back-end loaded. Big picture, we want to be prepared to execute with projects that are essentially ready for plug and play when the timing is appropriate, with a heavy bent towards being early versus late. Second question, Ketan, I believe, was around how we are managing OSB capacity. I would say largely consistent with what we have done in prior years, very focused on managing capacity to demand.

We are pleased to see the nice rebound in prices to begin the year and have been able to keep a healthy order file across our network. It feels more optimistic that supply and demand are a little more in balance than they had been for the majority of last year. Thank you.

Operator: One moment for the next question. Our next question will come from the line of George Staphos from Bank of America Securities. Your line is open. Hi. Good morning, everyone. This is Brad Barton on for George. Jason, congrats on the new role. We look forward to working with you.

Aaron Howald: Thanks, Brad.

Operator: Starting off, I know you touched a little bit on vinyl and affordability concerns and maybe some shifts there. But

George Leon Staphos: could you speak to more of the broad competitive environment that you are seeing in Siding right now?

Aaron Howald: What I would say, Brad, is broadly we are very confident that we are gaining share in all of the segments that we focus on. I think there is strong evidence of that if you look back at the last couple of years, with 2025 supporting that as well. Right now, with starts ticking up in the back half of 2025, it comes with its challenges. But we feel like in the new construction and repair and remodel segments, in particular, we have a relatively low share position and a very large field sales organization that is focused on winning new customers. That does not stop in a softer market, and we believe there are plenty of opportunities in front of us.

George Leon Staphos: Great. Thanks. As a follow-up, as you bring Expert Finish capacity online, can you speak to how you will have to ramp your marketing spend and investments, both in terms of the timeline and the magnitude, maybe compared to the $11,000,000 investment that you saw in 2025?

Aaron Howald: Over the last several years, you have seen an increase in both marketing spend and the addition of field sales resources to support the growth of Expert Finish. We did not put any of that on pause as we experienced allocation back in September or October. Those investments will continue going forward. We are very pleased with the growth we are seeing in Expert Finish and excited to bring on one of our newest state-of-the-art lines in Green Bay, Wisconsin.

George Leon Staphos: Great. Thanks for taking the questions.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Mark Weintraub from Seaport Research Partners. Your line is open.

Mark Adam Weintraub: Thank you. Last year, you mentioned sheds up a little better than 20% by your best guess estimate, obviously slowed in the first quarter. What are you embedding for sheds for the full year in 2026 versus 2025? To the extent that you have information, where would you say your shed business was last year relative to, say, the last ten years, or another appropriate time frame?

Aaron Howald: I will start with the first part of the question. In regards to shed, there has always been a bit of lumpiness to our order intake. Although inventories are higher than we anticipated, we are hearing anecdotally from several of our largest shed fabricators that underlying demand in this segment remains on a firm footing and trending very similarly to 2025 levels. This positive news, coupled with some new product innovations—specifically our Everyday Flooring series and SilverTech roofing that we launched to begin the year—gives us confidence we can get back to a normal trajectory quickly once inventories are depleted throughout the first quarter.

Mark Adam Weintraub: I am just—Because you were up 20% last year, was that getting you to what you consider to be normalized, or was that substantially better than what you consider normalized?

Aaron Howald: Last year was a bit of an anomaly because our shed distributors came into 2025 with inventories very lean. We had an inventory build throughout Q1 and Q2, and then, obviously, overshot the allocation prior to the 2026 price increase. We feel like the underlying demand is very stable in shed, and with new products we brought to market, we feel like there is growth opportunity in that segment even though we own a relatively high share position.

Ketan Mamtora: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Steven Ramsey from Thompson Research Group. Your line is open. Thanks for taking my question. I wanted to start with higher Siding EBITDA in the guidance

Matthew McKellar: and then breakeven OSB. Does that point to operating cash flow being somewhat near the 2025 results,

Steven Ramsey: and if so, CapEx points to free cash flow being roughly breakeven? Maybe you can talk to the assumptions there on free cash generation.

Alan J. Haughie: That is about right. Yes. You nailed it.

Steven Ramsey: Okay. Sounds good. Appreciate that. Is there an expected pace on the Siding margin ramp through the year? The last year or two, Q1 and Q2 EBITDA margin were in the same zone. Is it expected to be a steeper ramp upward going through 2026?

Alan J. Haughie: I would think of it as more seasonal. We had very strong Q1 and Q2s last year; hence the seasonality was tilted towards that first half. The seasonality of the volume—volume provides such huge leverage that the cadence of the EBITDA margin, while being on a modest rising curve, will follow the seasonality of volume. That is really the factor that most influences it, the leverage we get from the volume. That is helpful. Thank you. Thank you. One moment for our next question.

Operator: Our next question will come from the line of Casia Trasky from TD Cowen. Your line is open.

Michael Andrew Roxland: Hi there. It is Sasha. Great effort, though. I am on the call for Sean Steuart from TD Cowen. First question is around Siding. Can you comment what kind of

Steven Ramsey: Siding volume

Michael Andrew Roxland: pull-through you are seeing from your homebuilder channel right now? Please provide broader commentary about how any specific homebuilder relationships might be evolving.

Aaron Howald: Sorry, Kasia. You cut out a bit on the keyword. Could you repeat the question, please? Repeat the question.

Michael Andrew Roxland: Hi. Can you hear me better now?

Aaron Howald: That is much better. Yes. Thank you.

Michael Andrew Roxland: Great. The question was around Siding. I am curious about any thoughts on what kind of Siding volume pull-through you are seeing from your homebuilder channel and if you could provide broader commentary about how any specific homebuilder relationships might be evolving.

Aaron Howald: I will take that one. Thanks for the question, Kasia. Speaking to the homebuilder community, it is very different depending on region. There is certainly more strength in the northern markets where historically Siding has been strongest and softer in the Southeast, Texas, and some Western markets. It depends on geography. In terms of where we are with our relationships, I mentioned earlier the integration of LP. We are focused on leveraging our full portfolio of solutions to drive growth in the homebuilder segment. We know we are a very relevant supplier to this market, and that strategy is allowing us to offer greater value and be more creative and responsive to our customers’ needs. We are still in the early stages, but we are encouraged by the reception we have received from builders in response to the integration of LP.

Michael Andrew Roxland: Thanks for that, Jason. I want to make sure I did not mishear earlier.

Ketan Mamtora: Did you say that the

Michael Andrew Roxland: inventory buildup in the channel right now, you expect that to unwind over the course of

Steven Ramsey: Q1,

Michael Andrew Roxland: bringing us back to a more normalized steady state in Q2?

Aaron Howald: I will shed a little bit of light on that. We believe the dealer channel, those closest to the builder, did not necessarily increase inventories throughout the fall; they are focused more on working capital. However, our two-step customers, the folks we transact with most, took advantage of the allocation in advance of the price increase. We see that in their inventory reporting requirements looking backwards. Based on what we see—roughly two to four weeks of inventory at the two-step level—we believe that can be consumed heading into Q2 with the historical uplift in seasonal demand. So yes.

Michael Andrew Roxland: Got it. That is helpful context. Last one for me, on OSB, the segment EBITDA margins of negative 29%—is that largely attributable to the low mill operating rates in Q4, which presumably would have had a significant impact on your overall mill cost structure? Or are there any lumpy items in there? In particular, any one-time inventory write-downs?

Alan J. Haughie: The only inventory write-down that occurs is a mark-to-market on inventory that we carry on the books because the selling price is at times lower than the standard carrying cost. Nothing exceptional or out of the ordinary, or that has not occurred at various points over the last 20 years.

Aaron Howald: We did have a couple of reasonably large maintenance projects in the quarter that added a bit of expense, but it was mostly utilization rates and price that drove it.

Ketan Mamtora: Yeah.

Aaron Howald: Thank you.

Operator: One moment for our next question. Our next question will come from the line of Susan Maklari from Goldman Sachs. Your line is open.

Susan Marie Maklari: Thank you. Good morning, everyone.

Steven Ramsey: My first question is staying on OSB. Can you talk a bit about how you are thinking of the outlook for demand? The builders have largely talked about their starts this year being up low single digits. What does that imply in terms of the potential ramp for OSB? Then can you talk about your approach to capacity relative to that?

Aaron Howald: Thanks, Susan. Appreciate the question. Our focus is on matching our supply with customer demand. As mentioned earlier, we have seen a nice rebound to begin the year, but we feel like it is a supply-driven rebound. A couple of our competitors announced mill closures in Canada. There have also been some maintenance outages and some unscheduled downtime associated with the winter storm that is playing into the favorable pricing environment. Looking forward, we will need an improvement in demand to stay in balance as we head into Q2 and Q3. I am optimistic that will carry through as we head into the building season. Okay.

Susan Marie Maklari: That is helpful. Turning to the margin in the Siding segment, can you talk about what you are seeing in terms of input costs and freight? How should we think about any startup costs associated with Green Bay and how that will flow through as well?

Alan J. Haughie: In our guidance for the full-year Siding EBITDA margin, we have included some significant inflation. It is about $20,000,000 of raw material inflation, which is on our resin and paper overlay, largely contractual. So, $20,000,000 of raw materials plus $7,000,000 of labor and then some modest freight inflation. That inflation is baked into the full-year margin. We will see some of that already baked in in Q1. Was the other part of the question ramp-up costs for

Aaron Howald: Green Bay? Nothing significant.

Susan Marie Maklari: Okay.

George Leon Staphos: In that respect.

Susan Marie Maklari: Okay. Thanks for the color, guys.

Operator: Thank you. One moment for our next question.

Ketan Mamtora: Our next question will come from the line of

Operator: Kurt Yinger from D.A. Davidson. Your line is open.

Kurt Willem Yinger: Great. Thanks. Jason, you referenced the portfolio solutions approach. I was hoping you could talk about a couple of examples of how you are marketing that with the Siding business and the value-add component of that go-to-market strategy.

Aaron Howald: I will touch on that. The approach is to leverage our entire portfolio to drive growth for LP, and specifically our Siding business. The focus primarily is on the new construction segment to start with, but we also see opportunities within the shed segment and repair and remodel segment as well. We are in the early stages. We have a couple of builder wins that came as a result of this focus, and there are a few more on the horizon that I am not prepared to speak to today. I believe within the next quarter we will be able to highlight material wins that were a result of an enterprise approach to the segments we play in. Okay.

Kurt Willem Yinger: That is very helpful. In terms of the outlook, it sounds like at least in Q1, R&R versus the new residential pieces within Siding are performing similarly. Is that how you expect the whole shape of the year, or would you think that R&R could perhaps be a little more stable, notwithstanding the weather here in the first month and a half? Can you talk a bit about that, please? Thank you.

Aaron Howald: I feel like the repair and remodel segment is the most stable for us right now, followed by shed. Shed is a challenge for us in Q1 as we work through the channel inventory situation. We need to see a rebound in the new construction segment right now. It is softer than it was this time last year, and we are planning for an improvement throughout 2026.

Alan J. Haughie: Thanks, Jason.

Aaron Howald: Thanks, sir. Thank you.

Operator: This concludes the question and answer session. I would now like to turn it back over to Aaron for closing remarks.

Aaron Howald: Thank you, everyone, for joining us to discuss LP’s results for 2025 fourth quarter and the full year. For those of you who are at IBS in Orlando, we look forward to seeing you in our booth later this afternoon and are available for follow-up calls for those who are not able to join us in person. Everyone, stay safe, and we will talk to you soon.

Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone, have a great day.