路易斯安那太平洋 (LPX) 2026年第三季度业绩电话会：外墙板销售额创纪录，EBITDA指引达2.7亿至2.8亿美元

核心要点

• 路易斯安那太平洋公司（NYSE: LPX）公布 2026 财年第三季度净销售额为 6.91 亿美元，同比增加 2800 万美元，而总 EBITDA 持平于 8200 万美元。
• 墙板业务创下季度净销售额新高，达 4.73 亿美元，主要得益于 销量增长 2% 以及 平均售价上涨 5%。该部门 EBITDA 达到 1.19 亿美元，调整后 EBITDA 利润率高于 25%。
• 原材料和运费通胀导致墙板业务 EBITDA 同比减少了总计 1800 万美元，主因是 MDI 树脂、贴面纸、燃料和卡车运输成本上升。
• 定向结构板（OSB）业务营收为 1.80 亿美元，而该部门录得 2400 万美元的 EBITDA 亏损。销量增长了 7%，但平均售价下降、不利的产品组合以及通货膨胀给业绩带来了压力。
• 管理层预计 LP 全年 EBITDA 为 2.70 亿至 2.80 亿美元。预计全年墙板业务营收为 16.6 亿至 16.7 亿美元，EBITDA 为 4.15 亿至 4.25 亿美元。
• LP 正致力于扩大并简化其墙板分销网络。管理层预计，更广的地理覆盖范围以及与分销商更紧密的协作，将助力 SmartSide 长期市场份额的增长。

核心财务数据

业务与经营业绩

壁板业务

壁板业务恢复增长，尽管单户住宅开工率下降2%。更高的定价贡献了2300万美元的营收和 EBITDA，而更高的销量则增加了800万美元的营收以及400万美元的 EBITDA。

ExpertFinish 占壁板出货量的10%和壁板营收的16%，尽管本季度其出货量略有下降。管理层表示，分销商报告的 ExpertFinish 终端销售量同比增长8%，较2026年第二季度增长13%。

通货膨胀仍是主要制约因素。原材料成本使壁板 EBITDA 减少了1200万美元，而运输费用则带来了另外600万美元的逆风。计划内维护和停产期间的低库存额外增加了900万美元的其他成本。

LP 正在转变为更广泛的分销模式，覆盖超过100个网点以及大约12至13家合作伙伴。分阶段的库存过渡预计将持续两到三个季度，管理层希望避免出现无法反映终端消费需求的单次出货量激增。

OSB

OSB出货量增长了7%，但平均售价略低于上年同期水平。价格下行拖累营收和EBITDA各减少700万美元，而原材料与劳动力通胀导致EBITDA进一步减少700万美元。

一项1400万美元的有利库存估值调整以及300万美元的销售及管理费用和其他节省部分抵消了这些压力。管理层预计第四季度的实际实现价格将有所改善，因为OSB市场价格上涨发生在第三季度末，而LP的价格变动体现通常存在滞后。

LP将无限期关停其位于德克萨斯州贾斯珀的工厂，并临时暂停位于魁北克州马尼瓦基的工厂运营。管理层称这些举措是对市场需求疲软的应对，也是其产能管理策略的一部分。马尼瓦基工厂的暂停运营决定并不改变其作为未来Siding生产基地的潜力。

管理层业绩指引

LP宣布提高Siding售价，预计将带来约3.5%至4%的净收益（基于与2026年类似的产品组合）。管理层预计按新价格出货将于2027年1月中上旬开始，并认为在大多数原材料成本设想下，Siding均能实现正向的价格-成本收益。

公司未提供正式的2027财年指引。管理层指出，从历史来看，SmartSide出货量增速比单户住宅新开工量高出约4个百分点，但强调这只是历史背景参考，而非业绩展望计算公式。

风险与关注事项

• 原材料通货膨胀： MDI树脂、饰面纸以及其他与石化相关的原材料对原油价格依然敏感。
• 货运压力： 柴油价格上涨、运费上升以及卡车运力紧张继续推高成本。
• 住房需求： 管理层指出，住房负担能力下降、单户住宅开工量疲软以及房屋建造商利润率受压仍是当前面临的挑战。
• 分销过渡： 库存转移和经销商入驻可能会在未来两到三个季度造成短期出货波动。
• OSB需求及产品组合： 行业需求下滑迫使工厂减产，而客户表现出对通用型OSB的偏好，胜过高溢价的结构解决方案（Structural Solutions）产品。
• 季节性与检修： 冬季需求模式和计划内停产检修预计将拖累第四季度壁板（Siding）业务的盈利能力。

分析师问答环节亮点

• 壁板需求质量： 管理层表示，第四季度的增长并非单纯依靠经销商渠道压货。第三季度渠道库存下降，而终端动销和新接订单均显示终端需求持续。
• 分销优势： LP预计将扩大地理覆盖范围，建立更多SmartSide独家合作关系，并加强经销商与其下游销售策略之间的协调。预计过渡成本极小。
• 2027年定价： 宣布的涨价旨在抵消通胀影响，公司预计将在1月上旬至中旬实现更高的出厂价格。
• 建造商合作伙伴关系： LP表示，其更丰富的产品组合在大型建造商和预制房屋生产商的方案征集中正赢得青睐。管理层预计将在30至60天内获得更多信息。
• 替代外墙材料需求： 管理层注意到在某些市场，市场偏好正逐渐摆脱劳动密集型且昂贵的砖材，这有望扩大SmartSide的目标市场，尽管预计这不会成为短期内的主要增长驱动力。
• OSB产能： LP认为，针对Jasper和Maniwaki工厂采取的举措，使OSB生产网络能够更好地应对2027年可能更为疲软的需求环境。

业绩电话会议完整文字实录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good day, and thank you for standing by. Welcome to Q3 2026 Louisiana-Pacific Corporation Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bob Hopkins, Treasurer of Louisiana Pacific Corporation. Please go ahead.

Bob Hopkins

Thank you, operator, and good morning, everyone. Thank you for joining us to discuss LP Building Solutions results for the third quarter of 2026 and our updated guidance for the remainder of the year. My name is Bob Hopkins, LP's Treasurer. Joining me this morning are Jason Ringblom, our Chief Executive Officer; and Aaron Howald, our Chief Financial Officer.

Following these prepared remarks, we'll be happy to take a round of questions. During today's call, we will reference a presentation that is available on LP's Investor Relations website at investor.lpcorp.com. Our 8-K filing, earnings press release and other materials are also available there. And as always, today's discussion and materials contain 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 that are further supplemented by this morning's 8-K filing. Rather than reading those materials, I will incorporate them here by reference. And with that, I'll turn the call over to Jason.

Jason Ringblom

Thanks, Bob. Good morning, everyone, and welcome to LP's Third Quarter Earnings Call. We're glad you could join us. As expected, LP Siding business returned to year-over-year growth in the third quarter. Siding volumes grew by 2%, and net sales grew by 7%, setting a new record for Siding net sales and exceeding the high end of our guided range. We delivered that growth despite a 2% decline in single-family housing starts, continuing our long-term track record of gaining share in the markets we serve.

Higher Siding volumes and prices generated modest EBITDA growth in Siding despite a very challenging backdrop, particularly for raw materials and freight inflation. In OSB, we continue to execute our strategy and manage our capacity with discipline, evidenced by our utilization rate of 81% in the quarter and announced curtailments at our [ Jasper ] and Milwaukee mills.

Slide 5 of the presentation highlights our financial performance for the quarter. LP generated $691 million in net sales an increase of $28 million compared to the third quarter of last year, driven by Siding growth. Total EBITDA was $82 million, which was flat with the prior year despite significant inflationary headwinds. LP generated $112 million in operating cash flow in the quarter, of which we invested $56 million in capital expenditures to maintain our assets and support growing demand for SmartSide and ExpertFinish.

And then finally, we returned $21 million to shareholders through dividends. Before I turn the call over to Aaron for a closer look at LP's financial results, I'd like to highlight a few of the accomplishments and recognition our teams earned during the quarter.

Safety is a core value at LP, and I'm extremely proud to share that LP earned the [ Engineered Wood Association's Safest Company Award ] for the fourth consecutive year. We continued this momentum for safety in the third quarter, achieving a total incident rate or TIR of just 0.4. I am particularly proud to say that LP's expert finished facility in Roaring River, North Carolina, achieved the incredible milestone of 1 million work hours without a recordable incident. Safety is foundational to our culture here at LP, and these achievements are the result of our focus on continuous improvement with the ultimate goal of creating an injury-free workplace each and every day.

With that said, our people are fundamental to LP's success. Great people strengthen our culture, drive innovation and help us deliver strong results. That's why we work hard to attract and retain exceptional talent and make LP a place where we can all be our best. During the third quarter, we were proud to be recognized by Newsweek as one of America's greatest companies. The recognition considers financial performance, innovation, workplace culture and environmental sustainability.

One of our most important achievements this quarter is just beginning to show its impact and we believe it positions LP exceptionally well for continued growth and share gains. As we announced in early October, we have significantly transformed LP Siding distribution network, expanding our market presence product support and geographic reach.

Under the new model, specialty building products will provide expanded nationwide coverage for SmartSide and ExpertFinish, serving professional dealers, one-step distributors and retail customers complemented by distribution partners in designated regional markets. Those include existing LP partners, BlueLinx, [ Coastal Forest ] products, J.M. Thomas Forest products, Minot Builders Supply, Sherwood Lumber Supply, Taiga Building Products, Wausau Supply Company, Weyerhaeuser and [ WS Building Materials], many of whom will grow their coverage of SmartSide.

We are also pleased to welcome new partners Forest Products Supply Company in Palmer Donavin. These distributors will carry the full line of LP SmartSide products, including ExpertFinish in the Naturals collection and transition away from competing Siding products. Our SmartSide distribution partners share LP's focus on long-term growth, customer service and market development. They bring dedicated sales teams, sophisticated logistics networks and a shared passion for providing installers and homeowners with the best siding and trim products in the industry.

And finally, further demonstrating our Siding growth and share gains with America's largest homebuilders [ Taylor Morrison ] named LP as new Strategic Vendor of the Year. We're proud of this recognition and most importantly, proud of our growing partnership with [ Taylor Morrison ] and their trust in LP SmartSide and OSB products.

After a difficult start to the year, SmartSide is back on a growth footing, and we intend to stay here. As Aaron will detail in a few minutes, we anticipate year-over-year growth in siding volume and revenue in the fourth quarter and while we are not providing guidance for 2027 yet, we believe we are set up for a strong start to the year in all siding market segments.

Our return to growth reflects the strength of our strategic relationships with distributors and homebuilders, the outstanding quality, durability and aesthetics of SmartSide Siding and Trim and most importantly, the hard work of our incredible team. To everyone across LP who helps us execute our Siding growth strategy, thank you. I'm grateful for all that you do and very excited about what we can achieve together. And with that, I'll turn the call over to Aaron for a more detailed review of LP's financial results for the quarter and our updated Q4 and full year outlook.

Aaron Howald

Thanks, Jason, and thank you all for joining us this morning. Slide 7 of the presentation shows Siding results for the third quarter in more detail. Average selling prices were up 5% from prior year, adding $23 million in revenue and EBITDA, with the large rebate and mix benefits from earlier in the year, normalizing as expected, higher prices in Q3 were driven primarily by list price increases. As Jason mentioned, Siding sales volume increased by 2% overall, while ExpertFinish volume dipped slightly. ExpertFinish represented 10% of Siding volume and 16% of Siding revenue in the quarter. Higher volumes added $8 million of revenue and $4 million of EBITDA consistent with our historical incremental EBITDA margins for volume.

As you are all aware, inflation remains a significant headwind for LP and for our customers. Many of LP's raw materials have petrochemical inputs and higher diesel prices impact inbound and outbound freight. The year-over-year increase in raw materials resulted in a negative $12 million EBITDA impact for Siding in the third quarter, primarily driven by MDI resin and paper overlay.

Freight costs added a further $6 million of negative impact due to higher fuel prices as well as higher freight rates as trucking capacity remains tight. Raw material costs were modestly higher than we expected on our last call, but more or less in line with the sensitivities we have provided as crude oil prices increased.

Despite these inflationary pressures, siding remained modestly price/cost positive in the third quarter. The remaining $9 million in other costs primarily reflect the impacts of planned maintenance projects and falling inventory levels during those outages. Record net sales of $473 million exceeded the top end of our guidance range, as Jason mentioned. However, higher-than-expected raw material costs kept EBITDA just under the top of our range at $119 million. The resulting adjusted EBITDA margin for Siding was just over 25%.

Turning to OSB, results are summarized on Slide 8. While average OSB selling prices climbed in September, they averaged modestly lower than prior year, resulting in a $7 million year-over-year decline in both revenue and EBITDA. Given the timing of price increases late in the quarter and LP's typical lag as prices move, we expect higher realizations in Q4. OSB volumes increased by 7% in the quarter but unfavorable mix effects reduced EBITDA by $1 million. Raw material and labor inflation remained a challenge in OSB as well, resulting in a negative $7 million EBITDA impact year-over-year.

Finally, let me spend a minute unpacking the $17 million of other EBITDA benefits. $14 million of this is as a result of inventory valuation adjustments. Higher prices at quarter end resulted in favorable lower of cost or market adjustments to our inventory. The EBITDA benefit of those adjustments was magnified by the fact that prices and inventory valuations moved in the opposite direction in the third quarter of last year.

Operational excellence and cost discipline contributed another $3 million in savings for SG&A and other items. The net effect of all these factors resulted in revenue of $180 million and an EBITDA loss of $24 million both slightly above prior year. As you know, LP announced that we would indefinitely curtail our mill in Jasper, Texas and temporarily idle our mill in Maniwaki, Quebec in the fourth quarter.

These capacity reductions were an unfortunate but necessary response to ongoing softness in market demand, and they are consistent with our long-standing capacity management strategy. This was in no way a reflection on the excellent teams at those mills, and we are grateful for all their contributions to LP. We're working to minimize the impacts of these curtailments on our team members, and we look forward to restarting both mills when market conditions support doing so.

Turning to cash flow on Slide 9. Reductions in working capital contributed $48 million in cash in the quarter, primarily from lower inventories of logs and finished goods. This is typical of LP's seasonal working capital cycle. As Jason said, we generated $112 million in operating cash flow, spent $56 million for capital expenditures, returned $21 million to shareholders through dividends and ended the quarter with $265 million in cash. That left LP with just over $1 billion in liquidity at quarter end, including our undrawn revolving credit facility. This brings me to our updated guidance for fourth quarter and the full year.

As Jason said, we expect modest volume growth to continue for Siding in the fourth quarter. I should stress that this growth is not merely the result of inventory load-in, in support of our enhanced distribution network. On the contrary, sell-through rates were robust in Q3 as channel inventory contracted, and we believe our order intake in the fourth quarter is reflective of true end-use demand.

Roughly 3% growth will be mostly price with some negative mix effect, and we anticipate revenue in the range of $390 million to $400 million. We expect inflationary pressures to continue in both businesses and are planning seasonal maintenance outages, both of which present cost headwinds. As a result, we expect Siding EBITDA in the range of $80 million to $90 million for the fourth quarter.

We are increasing the lower bounds of the ranges for anticipated revenue and EBITDA for the full year. We now expect Siding revenue for the year to land between $1.66 billion and $1.67 billion, down about 1% compared to prior year with higher prices almost completely offsetting lower volumes. We expect full year siting EBITDA to land between $415 million and $425 million.

For OSB, we will offer our usual algorithmic guidance predicated on prices remaining flat at current levels. Assuming prices remain flat through year-end, we would expect the OSB segment to lose about $35 million in EBITDA in the fourth quarter as most of the favorable other impact in Q3 is nonrecurring. Full year EBITDA outlook has improved to about a $95 million loss with lower volumes and higher input costs, partially offsetting increased selling prices.

I should mention as a housekeeping note relative to OSB guidance that the volume and price sensitivities have been updated to reflect anticipated Q4 sales volumes and raw material costs. We now anticipate full year EBITDA for LP of between $270 million and $280 million, reflecting both the Q3 results and recent improvements in Siding and OSB outlook compared to prior guidance.

In conclusion, LP's team members are effectively executing our strategy against what remains a very challenging backdrop for housing affordability and raw material inflation and I want to echo Jason's comments and add my appreciation for everyone at LP who contributes to our progress and helps grow our culture of safety, sustainability and operational and commercial excellence. And with that, we will be happy to take your questions.

Operator

[Operator Instructions]. Our first question comes from the line of Matthew Bouley with Barclays.

分析师问答

Matthew Bouley

I'll start out with a question here on kind of the volume outlook and the new distribution and all that. I think I heard you say that the fourth quarter guidance is not due to sort of an extra inventory load in. Maybe you can kind of separate out the sort of sell-through trends to date -- and any kind of quantification around that load in. And I guess, along those lines, maybe if you could just kind of expand how your geographic coverage more broadly has changed as a result of these distribution changes?

Jason Ringblom

Thanks, Matt. I'll touch on that kind of broadly from a distribution perspective. So the overarching goal as we kind of approach this initiative was to really simplify and expand our distribution network with partners that really desire to be exclusive to LP SmartSide as their hard cladding solution. And as we go -- as we went through this process, we were very fortunate to have multiple options and ultimately are very pleased with where we landed.

We do expect the changes to result in a distribution network that is fully aligned to our commercial strategy, which we believe has tremendous potential to enhance our focus, to enhance collaboration and then ultimately, sales execution over the long haul. As it relates to the load in, that is something that is in process right now. We are executing a phased-in approach.

So really to minimize the impact of a onetime event -- so this will be over the next, I would say, 2 quarters, maybe even 3. So we're working with our current and new distribution partners to do that the best way we know possible, knowing that it's more of an art than a science. The first part of your question was around sell-through rates, I believe, maybe I'll touch on ExpertFinish first.

Yes, volumes right now for the year are anticipated. Our shipments are anticipated to be flat year-over-year. But you may recall that we were on a managed order file to begin the year. And based on our history being on a managed order file, it does take some time to change market perceptions on supply. So we went through that.

But our distributors are reporting sell-through rates that are positive year-over-year versus prior year quarter were up 8%. And then when you compare Q3 to Q2 of this year, we're actually up 13%. So seeing a nice trend there. And then on the prime side, we're also seeing sell-through rates that are comparable to prior year, which is encouraging, just given the softness in the market.

Matthew Bouley

Got it. Okay. Well, in addressing my, I guess, multipart question there. Secondly, sticking with Siding. Given the inflationary backdrop and presumably, I guess, kind of choppy end market demand, in my words, how are you thinking about pricing into early 2027? And kind of what do you think you need to do from here in order to offset the level of inflation we're seeing out there?

Jason Ringblom

Yes. So that's something, obviously, we've kept an eye on for the majority of the year. We've been fortunate to be price/cost positive up until the beginning of Q4. Obviously, that's turning around on us. So all of that was factored into the price increase that we announced in early October. As of today, we're anticipating netting roughly 3.5% to 4% on a similar mix to 2026 with Prime SmartSide being a hair higher than what we're anticipating on the ExpertFinish side. And in terms of when we expect to realize those price changes right now, based on our order file, we're expecting shipments to go out with the new prices sometime in early to mid-January.

Operator

Our next question comes from the line of Ketan Mamtora with BMO Capital Markets.

Ketan Mamtora

Just a follow-up to Matt's question. Do you have any sort of prebuy built into Q4? In the past, it used to be like 110% of what they typically buy. Is that sort of still the case in Q4 volumes?

Jason Ringblom

Ketan, thanks for the question. What I would say about Q4 of this year, it's a little bit more complex than prior years because obviously, we're working through the distribution changes. So we're working with those partners that will be exiting us throughout the quarter to manage their inventories down, get as much of that transferred to our new distributors.

And then looking at historical demand by region to manage the load-in appropriately with our new partners. So it is a little bit more complex or dynamic relative to what we've done in recent years, but we're keeping a very close eye on those channel inventories and working with current and existing distributors as we go through the process.

Ketan Mamtora

Understood. Okay. And then just as a follow-up, I'm recognizing that you are not giving 2027 guidance at the moment. But if you just look at -- turn to 2027, with the housing backdrop and the interest rates where they are, can you give us some framework in terms of how you think about kind of volumes next year it starts or, let's say, down mid-single digits. Is there a way for us to think about sort of outperforming the broad housing market?

Aaron Howald

Yes, I'll take that one, Ketan. We're -- as you said, we are not giving guidance for 2027 yet. But on the last call, we did update everyone on a multiyear historical performance for SmartSide for both volume and revenue relative to single-family starts. Admittedly not a perfect proxy for our business given the diverse markets that we serve, but we've pretty consistently outperformed those markets by, call it, about 4% on volume, quite a bit more on price, given both mix and our pricing power while nobody knows what starts are going to be in 2027 yet. So that is not a hint at an algorithmic guidance but it's merely a reflection of our historical performance, and that's what gives us confidence in the product and our teams to deliver.

Operator

Our next question comes from the line of Philip Ng with Jefferies.

Philip Ng

You talked about this new partnership with Taylor Morrison. Can you explain what that exactly entails? Is it deciding OSB, a bundling effort? And perhaps any early look in terms of the contribution and potential ramp for next year?

Jason Ringblom

Yes. Thanks, Philip. I'll touch on that briefly. So we've done business with Taylor Morrison for a number of years. And on prior calls, we've talked a fair amount about our enterprise programs and how we're really leveraging the breadth of our entire portfolio to position programs with builders of scale in a way that will allow us to get greater access to markets where we've historically been underpenetrated. So we worked closely with TM over the course of the past a year or so to structure a program that met their needs and ours and are just very pleased with the progress to date and really look forward to growing the partnership, again in those markets where it's beneficial for Taylor Morrison and LP over the long haul.

Philip Ng

Okay. Helpful. And then Jason, you provided some helpful insight in terms of your order book and visibility, it sounds generally pretty construction, particularly on siding. But clearly, more mortgage rates are at and builder sentiment deteriorating. How does that kind of put in -- how does that play into your outlook, what you're seeing? Have your customers talked about working down inventory? And then on the flip side, R&R is certainly a little more murky. Any color in terms of your contractors, your dealers, what they're saying on the R&R side of things as we kind of look out to '27?

Jason Ringblom

Yes. So maybe I'll just touch on the first part of the question regarding the outlook and where channel inventories stand. So from a Prime SmartSide perspective, we are seeing channel inventories actually come down versus prior quarter and prior year. Same with ExpertFinish, but I would still classify them as seasonally normal, but again, trending a little bit lighter. This is obviously fluid with some of the changes going on with our distribution network, but we're going to manage that closely as we work through the load in.

In terms of looking ahead to next year, I mean, really what we're paying close attention to is the sell-through rates that our distributors report to us on a monthly basis. And that gives us confidence that the share gains that we're after in the segments we play in, off-site repair remodel and new construction are going to carry out into the New Year. We're doing our best to minimize all the noise that you mentioned earlier and just focus on the long term and driving share gains in all the market segments that we play in.

Operator

Our next question comes from the line of Steven Ramsey with Thompson Research Group. .

Brian Biros

This is actually Brian Biros on for Steven. First one, I guess, with your pricing moves in Siding and I guess the decisions you've made or not made in this kind of rising commodity input cost environment here. How do you assess the benefits in share capture at this point?

Aaron Howald

Yes, Brian, thanks. That's a good question. It is very hard to quantify what portion of our volume increases that we've seen in the third quarter and we expect in the fourth quarter to be the result of our decision not to take major price increases. It can't have hurt. When the premium move from vinyl to SmartSide, for example, collapses a little bit because of final price increases that can't hurt our share gain. It's very difficult for us to quantify.

Brian Biros

Understood. And I guess maybe similar related question, I guess, just with the new distribution deals you've announced, does this enable you to capture share in a maybe better way than before? Are you seeing any large builders or retailers kind of maybe more enticed to come to you for product?

I mean you talked a little bit about this in the prepared remarks and some of the other questions. But I guess just what are you looking for in the near and medium term, to I guess, measure the difference and ultimately, I guess, the benefits of these moves.

Jason Ringblom

Yes, I'll touch on that. I mean, I think the largest benefit is just going to come from an alignment perspective to our strategy. If you think about our new distribution footprint I mean it's over 100 locations, what, 12 or 13 different partners. If you add up the entire field sales organization, it's much larger than what we have here at LP.

So it's an opportunity really for us to drive or to create an extension of our sales force, getting our distribution partners more dialed into our downstream demand creation efforts and helping pull through new customers. So I think regardless of how you look at it, it's definitely going to be a net benefit as we think about the future.

Operator

Our next question comes from Mike Roxland with Truist Securities.

Michael Roxland

Jason, you mentioned a phased-in approach to the new distributors, which could take in the next 2 to 3 quarters. Can you talk about the cost impact as a result of that transition? And also what impact do you expect on Siding volumes?

Aaron Howald

Sorry, Mike, could you repeat the question? .

Michael Roxland

Sure. You mentioned in terms of this whole with specialty building products and all the other distributors you laid out there, a [ faded ] approach in terms of the transition, in terms of working through with your existing distributors working through inventories and then ultimately, obviously, working with new distributors, excuse me, over a certain period of time.

You said this transition from old to new could take about 2 to 3 quarters. Is there a cost impact at all in terms of making this transition? And is there anything from a signing volume perspective that we should be aware of as you make this transition as well?

Aaron Howald

Now as Jason said, we're trying to phase it in so that there isn't a large step function increase in volume. We -- we're trying to minimize that. In terms of a cost impact, should be very minimal. So no, I think that our goal, as we make this transition is to make it clear that the volumes that we ship are reflective of true end-use demand so that we don't -- so that we don't create more noise than is inherent in a process like this.

Michael Roxland

Got it. Okay, makes sense, Aaron. And then just one quick one. Maniwaki, did I hear you correctly say that's going to be indefinitely curtailed as well? Or is that a mill that you're taking down for 4Q and then it should restart next year?

Aaron Howald

It's the latter. [ Jasper ] is an indefinite curtailment. Maniwaki is temporarily idled, and this has no impact whatsoever in terms of the attractiveness of Maniwaki as a potential future siding location. Thanks, Mike.

Operator

Our next question comes from Jeff Stevenson with Loop Capital.

Jeffrey Stevenson

Can you talk about how shed sell-through demand in your Siding business trended after a slow start to the year what your expectations are for end market demand as we move through the remainder of 2026?

Jason Ringblom

Yes. Happy to elaborate on that, Jeff. When you look at our shed segment, obviously, we started the year a little rough, but we have rebounded nicely throughout the course of the second half of the year after our distribution partners, along with the shed fabricators and dealers went through a rebalancing act of their inventories. We do play close attention to sell-through rates at a dealer level. A lot of that is anecdotal feedback for us, but we are -- we do feel like the underlying segment as a whole is pretty flat year-over-year.

So our focus is really -- continues to be on growing our share of wallet with all the shed fabricators that are partners of LP. So that would be opportunities to grow in flooring and roofing and trim beyond the panel market share that we enjoy. So we do believe that we'll be back on a growth trend as we look to the future and are excited about the offsite segment as it relates to our Siding growth strategy.

Jeffrey Stevenson

Great. That's very helpful. And then second, do you believe that margin pressure that production builders continue to see from ongoing buyer incentives could slow the pace of channel share gains for alternative siding products such as SmartSide and [ Lugo ] traditional materials like vinyl as they look to reduce costs if we see another challenging year of single-family starts next year?

Aaron Howald

Yes. Maybe, Jeff, with vinyl producers taking midyear price increases, that has probably blunted that effect somewhat. But there's an offsetting potential benefit that we could see as well for the same reason. We're beginning to see more evidence of preference shift away from brick because it's so labor intensive and so expensive.

So I think that there are some ways that LP could actually benefit from that ongoing margin pressure as well. So we're watching it. And we've certainly seen margin pressure before and have historically outperformed the market. That's what we intend to continue to do.

Operator

Our next question comes from the line of Susan Maklari with Goldman Sachs.

Susan Maklari

My first question is going back to pricing and siding. I think you mentioned that you expect about a 3.5% to 4% price benefit in '27 on top of mix. Can you talk a bit about what that [ assumes ] in terms of an inflationary backdrop? And how you're generally thinking about price costs as we look to the next couple of quarters and how much mix could benefit you?

Aaron Howald

Yes. So, I'll take that one. Price cost is going to be most challenged in the fourth quarter because raw materials continue to be a headwind and also because the impacts we've been talking about all year in terms of the disproportionately large positive price/mix effect we saw in the first quarter due to low shed volumes and some rebate adjustments and things like that.

All of those effects are normalizing a little bit into the back half of the year. But Jason mentioned our price increase for next year, I think under anything but very negative changes for raw materials next year, we should be healthily price/cost positive as we head into the next year

Susan Maklari

Okay. All right. That's helpful. And my second question is on the [indiscernible]. Think about the changes that you've announced on the production side there. Are there any implications from that to structural solutions? Can you just talk more broadly about the demand environment for Structural Solutions given the slowdown in single-family starts that we're seeing?

Aaron Howald

Sure. Well, as Jason said, we picked the mills that we idled were a portfolio decision rather than a mill-specific decision and Structural Solutions mix was a component of that decision. But what I would say is that what we have been seeing in an environment where homebuilder margins have been compressed, is there's been a bit of a preference shift to more commodity OSB products.

It's a little counterintuitive that absolutely price for Structural Solutions is lower, but the percent premium to step up from commodity is larger. And so that has explained the mix effect that you saw in the third quarter. But I would say our capacity decisions are much more related to overall demand than any kind of structural solutions dynamic.

Operator

Our next question comes from Sean Steuart with TD Cowen.

Sean Steuart

A couple of questions, and thanks for all the detail on the siding market context. But I'm going to start with CapEx, Aaron. You guys have lowered your 2026 guide, and it's on the maintenance side, the sustaining maintenance side. Should we view that as a deferral of maintenance projects? Or are there any read-throughs in terms of the structural shift in how you're thinking about that expense?

Aaron Howald

No real structural changes, largely deferrals. One of the benefits of a flexible program is that we can adjust as we have for the past couple of years to respond -- in response to market needs. But idling one facility indefinitely and another one for a short period of time, also lets us defer any of the projects that we had planned for those facilities. So no structural change to that, just pretty consistent with the way we try to be agile and flexible as we manage our CapEx. And then I should report no change in growth capital either. Sorry, to step on you there, Sean. We're full speed ahead on North branch.

Sean Steuart

Understood. And appreciating there's no urgency for whether it's Maniwaki or something else in terms of the next Siding conversion. But is there any -- and we'll get this, I imagine with the February guidance for '27, but is there any spending preliminary work on an exercising conversion that would be anticipated in the near term?

Aaron Howald

Not a significant amount. We'll get -- we'll get more detail when we get to the February call, as you said. What I want to say is that we -- as always, we want to have siding capacity available a little bit before we need it, hopefully, not too long before we need it.

But wherever the next capacity is added, it will be a longer duration project than our previous conversions have been. And so that spend will start a little bit earlier relative to new capacity coming online than previous projects. But we'll have a lot more detail for that as we head into next year and as we get closer to the project really being underway.

Operator

Our next question comes from the line of Kurt Yinger with Davidson.

Kurt Yinger

I believe these winter months are typically pretty active in terms of RFPs from the big builders. So I just love to hear maybe some initial thoughts about the potential to kind of build off existing or adding to new kind of enterprise partnerships as we move into 2027?

Jason Ringblom

Thanks, Kurt. Yes, you're right. We're in the midst of RFP season now and have a handful of programs that we're working on with builders of scale, and that includes manufactured housing producers as well. What I would say, Kurt, is that these programs are progressing nicely. They look promising at this point. We're hopeful to have a little bit more to share at the next call.

But the main point I would say as it relates to our enterprise approach is that the bundling of our broad portfolio is truly resonating with these customers. They value the installation efficiencies, the durability, the quality that the SmartSide brand is known for. And then the other benefit is we are beginning to see evidence of a halo effect from the expanded positions with dealers and under-penetrated markets for SmartSide.

So we're very excited about the opportunity to build our business around those stocking dealer positions in new markets. So progressing nicely. You never know how these programs are going to unfold, but we should have more information over the course of the next 30 to 60 days.

Kurt Yinger

Okay. That's great. And Aaron, maybe just on OSB. I mean, I know there's a lot of moving pieces with the inventory adjustment and prices by region are up different amounts. But if we just look at the composite, I mean, it's seen a pretty big move the last couple of months. And just wondering if there are any other kind of big offsets in the Q4 guide related to the curtailments or maintenance that might be eating into that otherwise more favorable pricing dynamic?

Aaron Howald

No, I think we -- I think I mentioned most of them in the prepared remarks. Obviously, our volumes are going to be lower in the fourth quarter as a result of those curtailments. Also within price, we've seen a larger increase in thinner products than in thicker products, flooring prices haven't gone up as much, which is a little bit of a drag for us. And of course, raw materials continue to be a bit of a headwind. So no, I think we covered most of the big moving pieces in there.

Operator

Our next question comes from the line of [ Trevor Allinson ] of Wolfe Research.

Unknown Analyst

First one is on your 4Q Siding revenue guidance. It does seem like it's a bit below normal seasonal trends, but it sounds like from your commentary here that demand remains pretty healthy. So is that little bit lower than seasonal number, just driven by some of the channel inventory dynamics that you were talking about, those moving a bit lower? Is it just some conservatism reflecting a very uncertain macro? Any color you can provide there on the sequential trends.

Aaron Howald

Well, I mean, there's perhaps a little bit of conservatism in there, but it's within the normal range of seasonal falloff as we head into the winter months. Jason, I think, reinforced what we're seeing from a sell-through rate standpoint. And we've seen pretty consistent end-use demand, which is very encouraging.

One of the effects of trying to phase in the inventory as we are avoiding -- we're trying to avoid a large load in, which, of course, would show up as revenue. So we're trying to be cautious not just about levels of conservatism, but also we don't want to perturb the inventory channel any more than necessary as we transition to a new distribution network. So I really think it's the result of all of those factors, Trevor.

Unknown Executive

Yes, one point there. I mean we learned a hard less than Q4 of last year and ultimately, we're trying not to repeat that. So maybe a little bit of conservatism in there. But -- it's a tough balancing act given the distribution changes.

Unknown Analyst

Yes, makes sense. And then second question is just on your views on your own OSB capacity here and industry capacity. You made the Jasper announcement before rates jumped, but now you've since made Maniwaki announcement, how are you thinking about your own OSB capacity currently in light of housing starts potentially being down next year. And then some of my questions just kind of industry capacity if you think there needs to be any more moves there.

Jason Ringblom

Yes, I'll touch on that one. So if you think about our operating position leading up to the Jasper and Maniwaki curtailments, we were operating roughly in the 75-ish percent range from a network utilization standpoint. So we're doing everything we could to balance our capacity with LP customer demand while keeping a close eye on projections for the future.

And as the year went on and single-family starts retracted further we felt the need to really look at our network and optimize it to the extent we needed to, to position the business for a further down cycle in OSB. So we think we're set up nicely going into 2027 and are going through the committed volume process currently to [ shore ] up our contract strategy and figure out how much open market would we'll have to sell in 2027.

Operator

Our next question comes from the line of George Staphos with Bank of America.

George Staphos

Jumping on the line here late, at an industry conference. This may have been already asked. First of all, Aaron, congratulations and looking forward to working with you now and the role and congrats on the first conference call.

I would say, as regards to inflation, have you adjusted any of your sensitivity rates that you provided in the past relative to what we've seen in the last 9 months, 6 months, and for that matter, your operating stance and how that might have impacted your sensitivity to oil and the like. Relatedly, have you been working on ways to maybe engineer the product differently or just your supply chain so that maybe you don't have quite the same cost sensitivity with oil and the like? Or is it just about raising pricing? And then I had a follow-on.

Aaron Howald

Yes. Thanks, George. I'll tackle some of that. In terms of sensitivity to crude oil prices, no, those really haven't been adjusted. Crude oil prices themselves have been pretty volatile as everybody understands. I think the October average was up about $20 relative to the price point on our August call, and it's fallen about $5 or $6 since that -- in the past few days. But -- so that explains some of the headwinds that we've seen.

In terms of our guidance sensitivities, yes, we made some adjustments that we described in the prepared remarks and are detailed in the footnote on the guidance slide to reflect lower expected volumes in the fourth quarter because of the curtailment and also slightly lower margins than in the guide because of raw materials.

In terms of engineering the product, there are some opportunities there, and we've got excellent teams in our operations team that are looking at opportunities there. We use MDI resin exclusively in siding because it performs really, really well. And so we don't have too many opportunities there. And we certainly don't want to dial down the dosage rate or do rash things like that in the near term. But yes, I would say broadly, we're looking at opportunities, but there's not a whole lot we can do to offset most of the fluctuations in crude oil and similar inputs.

George Staphos

Okay. And then again, if this sort of came up in the dialogue, happy to look at the transcript. But if not, have you been getting any more commentary questions from your customers regarding Class A fire certification and whether you're at some point, you'll want to have that in the market sooner than later? Or is it really not a factor at this juncture?

Obviously, it's only going to be a big deal in certain regions if it's a deal at all. But how would you have us think about it? What are your customers asking about that? And when would you be ready perhaps with a Class A rated product?

Jason Ringblom

Yes. I would say there's been more of a focus on some of the [indiscernible] codes really because of some of the changes that were made in the state of Colorado. What I would say about our sales specifically is when you look at our sales so far out west year-to-date where [ WOI ] has been a factor for many years. We have yet to see any sort of change in sell-through rates relative to housing starts.

So it's something that we're keeping a close eye on. We're also doing everything we can to defend our position through educating local authorities on the value proposition of SmartSide, while in parallel to your point, working on NPD initiatives that would potentially open up new markets for LP in the future with a fire solution. But what I would say is these codes apply to a very small portion of the addressable market. It's something we're keeping a close eye on, but it hasn't affected our growth trajectory.

Operator

Our next question comes from the line of Adam Baumgarten with Vertical Research.

Adam Baumgarten

Just, Aaron, back to your prior comment around price cost into next year. Just to clarify, you said that with the pricing you expect to execute and I'm assuming where inputs are today rolling that forward, you expect to be price cost positive for the year. Does that include the early part of the year when these price increases go effective?

Aaron Howald

Yes. Bill, as Jason said, we expect to be realizing those price increases early mid-January. So yes.

Adam Baumgarten

Okay. Got it. And then just on MDI, there's been some chatter out there that maybe prices are moderating a little bit sequentially with some of the force majeures coming off and capacity coming back up. Are you starting to see that or hear that from your suppliers as you move through the fourth quarter here?

Aaron Howald

We see the same news you do. And of course, we're optimistic about that. But we -- as we've discussed, on prior calls, our supply contracts tend to have lagging algorithmic adjustments in them. We don't pay spot for many of these raw materials in the short term. So if those trends continue and if [ MDI ] prices -- if MDI spot prices stay lower for some period of time, then we'll certainly see that in our purchase prices. So we're -- fingers crossed those trends continue.

Operator

Our next question comes from the line of Mark Weintraub with Seaport Research Partners.

Mark Weintraub

So you've articulated that with the musical chairs going on in distribution, you feel it's a net positive. That's certainly how I've interpreted. But presumably, there are puts and takes. Can you sort of help us understand where the benefits are that are going to outweigh any possible negative?

Jason Ringblom

Yes. There's certainly puts and takes, Mike, sorry. But when you look at the magnitude of this change relative to what we've gone through in our past, it's not of the same scale. But we really were focused on finding exclusive partners to the SmartSide brand and we were able to achieve that, which is going to create that better alignment around our strategy and improve execution.

So even though there have been some musical chairs, we think the partners that we've aligned with are now going to be loyal to promoting the SmartSide brand and more dialed into our downstream demand creation strategy. So yes, there are some new partners that will have to get educated and onboarded no different than some of the changes we've made in the past, but that's a pretty quick process, and we believe we'll be off to the races to start 2027.

Aaron Howald

Yes. I think the churn is going to be near term. The negative is just the noise in the -- during the transition. Longer term, we've got greater geographic reach, greater exclusivity. It's a long-term positive.

Operator

Our next question comes from the line of Matthew McKellar with RBC Capital Markets.

Matthew McKellar

Just following up on a comment you made about a preference shift away from brick given that labor intensity and cost. I think brick has seemingly been donating some share in new resi over the past few years. Could you give us any more detail on how material or abrupt that preference shift you're seeing is?

Jason Ringblom

That's a good question, Matt. It's not very abrupt. And so far, it's pretty small, but it's an encouraging trend. The brick is very expensive. And certainly, if you drive around Nashville, you see a lot of white brick homes. Nobody makes white bricks. So those homes have been painted. If you're going to paint a substrate, brick is an extremely expensive substrate to paint. So as those trends continue, we'll begin to see a little bit of an expansion in our addressable market. It will be geographically patchy.

There are some markets that are stronger or weaker for brick. It's not going to be a massive driver of growth for us, but it does expand the addressable market. It does increase the geographies and the markets where SmartSide can play and it reinforces the value proposition for our product being very durable and very efficient to install. So we're optimistic that, that trend will continue.

Operator

This concludes the question-and-answer session. I would now like to turn it back to Bob Hopkins, Treasurer of Louisiana-Pacific Corporation for closing remarks.

Bob Hopkins

Thank you, operator. With no more questions, we'll end the call there. Thank you all for joining us, and look forward to speaking with you soon.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.