Good day, and welcome to the Q3 2023 Louisiana-Pacific Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Aaron Howald, Vice President of Investor Relations and Business Development. Please go ahead, sir. Thank you, operator, and good morning, everyone. Thank you for joining us to discuss LP's results for the third quarter of 2023, as well as our updated full-year outlook. My name is Aaron Howald, and I am LP's Vice President of Investor Relations and Business Development. With me this morning are Brad Southern, LP's Chief Executive Officer, and Alan Haughie, LP's Chief Financial Officer. During this morning's call, we will refer to a presentation that is available on LP's IR webpage, which is investor.lpcorp.com. Our 8-K filing is also available there, along with our earnings press release and other materials detailing LP's strategy and sustainable business model. Today's discussion will contain forward-looking statements and non-GAAP financial metrics, as described on slides two and three of the earnings presentation. The appendix of the presentation also contains reconciliations that are further supplemented by this morning's 8-K. I will incorporate that content herein by reference, rather than reading those slides. With that, I'll turn the call over to Brad. Thanks, Aaron, and thank you all for joining us to discuss LP's Q3 results and our full-year outlook. The third quarter was our strongest of the year by far for both Siding and OSB. It was also a quarter in which LP's teams achieved key milestones for growth and sustainability, and one in which we were recognized for our continuing focus on building a stronger and more inclusive culture. Page five of the presentation shows financial highlights for the quarter. LP generated $728 million in net sales in the quarter, which was 15% lower than Q3 of last year. But higher OSB prices and improved sell-through and inventory normalization in Siding led to a higher overall EBITDA margin than last year, with a result that LP earned $190 million in EBITDA, only 5% less in Q3 of last year. As a result, LP exceeded the high end of our guidance range, despite OSB prices falling in September. The $190 million in EBITDA translated very cleanly to $187 million in operating cash flow, and LP ended the quarter with $160 million in cash on hand, after returning $17 million to shareholders via dividends and investing $49 million in growth and sustaining capital. We repaid our revolving credit facility and ended the quarter with over $700 million in liquidity. Page seven of the presentation shows Siding growth relative to the housing market on a trailing twelve-month basis. Remember that Q3 of 2022 was the best quarter on record for Siding volume and revenue, as we remained on a managed order file until early December of last year. Despite this very difficult comp, on a trailing 12-month basis, SmartSide sales volume beat single-family housing starts by 10 percentage points. Starts were down 16%, but Siding volume was down only 6%, and Siding prices were up 8%. As you can see in the pie chart to the right, Expert Finish was stable at 8% of volume in the quarter. In the first half of 2023, Siding sales were dampened by inventory destocking after we finally transitioned from a Managed Order File late last year. Q3 saw the normalization of sell-through rates and inventory levels. As expected, and despite a market that is facing increasing affordability challenges, higher interest rates, and elevated economic uncertainty, the third quarter saw sequentially higher volumes and average selling prices in the Siding business compared to Q2. As a result, we believe that the order patterns and channel inventory levels we are experiencing now are consistent with normal seasonal patterns, with minimal lingering headwinds from destocking. This was not the first time that the Siding business has been on a managed order file, and the inventory digestion period before the resumption of a normal order cadence takes time. I am proud of the perseverance and dedication that Siding sales and operations teams demonstrated as we worked through this process. Before I hand the call over to Alan, I want to mention a few additional accomplishments in the quarter. Last month, we officially opened our newest pre-finishing facility in Bath, New York. This brings enhanced scale, efficiency, and geographic expansion to Expert Finish. I want to officially welcome the Bath team to LP. Bath is the third new facility for the Siding business in the past two years after the conversions of Holton and Sagola. I am proud of the safe and efficient execution of all our recent capacity additions in Siding and confident that we are well positioned for resumed growth in the diverse markets we serve. In the third quarter, LP published our third sustainability report, as well as environmental product declarations for the Structural Solutions portfolio of value-added OSB products. Structural Solutions products like TechShield Radiant Barrier, WeatherLogic Sheathing with integrated air and water barrier, and Legacy Flooring all sequester more carbon than is emitted during their manufacturing and lifecycle. Our customers and shareholders can be confident that LP's suite of engineered wood products, combined with our responsible and sustainable management of forest resources-... means that LP can deliver best-in-class OSB and siding products, while also having a positive impact on the environment. This is most notable in siding, where competing products are made predominantly of cement or vinyl. When it comes to durable products with great curb appeal and positive impact for builders, contractors, homeowners, and the environment, it is very hard to beat LP's portfolio of sustainable and carbon-negative engineered wood building solutions. Lastly, before I turn the call over to Alan, I'm happy to say that LP was named by our local newspaper, The Tennessean, and USA Today, the top workplace in Middle Tennessee, and by Newsweek, as one of America's greatest workplaces. Building a safe and inclusive culture where all of our team members feel welcome and encouraged, is its own reward. While we will never stop trying to improve, I am proud of our company and the progress we continue to make. With that, I will turn the call over to Alan. Thanks, Brad. Slide seven of the presentation shows the third quarter year-over-year revenue and EBITDA waterfall for siding. The third quarter of last year was a high-water mark for both siding volume and revenue, and admittedly, presents a difficult comp this year. However, as predicted, volumes and prices improved sequentially over the second quarter of this year by 6% and 2%, respectively. On a year-over-year basis, prices were up 3 percentage points. The combined impact of last January's list price increase and favorable product mix added $10 million of revenue and EBITDA. Volume was down 16%, with ExpertFinish holding its ground rather better than primed. I'm gonna take a moment now to recap the ramp-up and conversion cost trend this year. The business carried embedded ramp-up costs of $16 million in the first quarter of this year, $10 million in the second quarter, and now $8 million this quarter, including $1 million for the recently opened Bath Pre-Finishing facility. This $8 million is $3 million higher than the $5 million we incurred in the third quarter of last year, and it is this $3 million increase that shows up on the waterfall. Now, I mention this detail to emphasize the point that our current EBITDA margins are carrying the burden or the weight, if you will, of these costs. Moreover, the recently opened Bath facility will add about $4 million of incremental costs in the fourth quarter as it begins ramping up. So despite generating a respectable 21% EBITDA margin in the third quarter, adding back the embedded $8 million I just referenced, together with $5 million for the Dawson press rebuild, as shown in the last column of the waterfall, would produce an underlying EBITDA margin of about 24%. This margin was, of course, helped by the slowing of inflationary pressures on freight and raw materials, which delivered a $9 million EBITDA tailwind net of wage inflation. Slide eight tells the third quarter story for OSB, where price gains and cost controls more than offset volume reductions, resulting in a small year-over-year increase in EBITDA despite the revenue decline. An OSB price drop late in the quarter notwithstanding, higher prices added $28 million of revenue and EBITDA compared to last year. However, despite higher net prices, the overall demand environment was softer than last year, with open market volumes particularly weak. And so, the volume reduction in the quarter reflects not only the removal of the Sagola mill from the OSB fleet, but also market curtailments in response to this softer demand. As with siding, raw material deflation provided a small tailwind, but the star of the show was cost control, which contributed $11 million of EBITDA. In other words, despite significantly lower volumes, the OSB business ran very efficiently, as demonstrated not only by the dollars, but by the four percentage point improvement in operating efficiency or OEE. As Brad has already mentioned, it was a clean quarter for cash flow, as shown on slide nine, with $190 million of EBITDA, producing $187 million of operating cash flow. We spent $49 million in growth and maintenance capital, returned $17 million to shareholders via the quarterly dividend, and repaid the $30 million draw on our revolver. As a result, cash balances increased by $90 million in the quarter to end September at $160 million. Cash has continued to increase subsequently and currently stands at a little over $200 million. Finally, let me discuss our updated full-year outlook on slide 10. With respect to CapEx, having already spent $236 million so far in 2023, the fourth quarter will likely look a lot like the third quarter for capital spending. The bulk of the near-term growth and conversion capital is behind us, with Sagola and Bath now up and running, so the fourth quarter spend will mostly be on sustaining maintenance. Siding revenue for the third quarter largely met our internal expectations, so we are reiterating the guidance we provided on our second quarter call, that we expect a full-year siding revenue decline of about 10%, which implies a fourth quarter revenue decline of about 16%. For OSB, we will continue to offer algorithmic revenue guidance based on the assumption that OSB prices remain at the levels published by Random Lengths last Friday. Under this price model and accounting for market downtime, we would expect OSB revenue to be down 30% sequentially compared to the third quarter. Under these assumptions, including the start-up costs of the Bath pre-finishing facility I referenced earlier, and some maintenance expenses in both businesses, we would expect total company fourth quarter EBITDA to be between $60 million and $80 million. Now, before we take your questions, please allow me to anticipate one. We're not yet in a position to offer revenue or EBITDA guidance for 2024. But our capital allocation strategy remains unchanged, as will the flexibility with which we deploy capital to invest in capacity. If the housing and repair and remodel markets are basically flat next year, as most forecasters currently anticipate, then Sagola and Bath provide healthy siding business with sufficient capacity to press and pre-finish enough SmartSide to meet demand. And when might we start converting the recently acquired Wawa facility to siding? Well, the answer, as established on prior calls, is when the market demands it. We don't know exactly when that will be, but we have sufficient capacity, liquidity, and most importantly, flexibility, to be responsive to demand when that time comes. In the meantime, our capital allocation strategy remains to earn cash, invest in our growth as needed, and return a significant amount of the remainder to shareholders. And with that, we'll be happy to take a round of questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Mark Weintraub with Seaport Research Partners. Your line is open. Thank you. The first question, if we think about the fourth quarter siding margins, I guess we're going to have Bath against us, but kind of order of magnitude, how should we think about it being relative to the third quarter? Oh, yeah. Given that volumes in the fourth quarter, if we hit this forecast, are going to be lower than the third quarter, and the business has a high variable margin, then, you know, even excluding the Bath costs, the EBITDA margin would have been a little lower than Q3. And then, of course, as we add on, as you point out, the Bath costs that'll lower the margin a little bit more. So, you know, the closest approximation to the siding Q4 performance, closest approximation is probably Q2 of this year. Similar-ish in terms of most of the drivers. Got it. And I believe that was what? 18%-19% EBITDA margins in Q2? Yeah, that was Q2, so closest approximation. I'm not necessarily committing to that number, but the closest approximation, the shape of the quarter is very similar. Yeah. Okay, thank you. And then, as we're thinking about next year, assuming you're not moving forward with Wawa and the startup costs there, which I guess seem kind of unlikely, can we add that $38 million of startup costs with Sagola, press rebuilds, the Bath expansion, et cetera, when we bridge 2024 versus 2023, or would you suggest we think about it differently from that? I'd suggest thinking about it slightly differently. So a proportion of those costs are permanently embedded. They're the fixed costs of having the facilities. Now, of course, that sets us up to be able to bring on incremental volume very efficiently because the fixed cost infrastructure is largely already in place. So the real way to think about it is, those embedded costs set us up to potentially have a high variable incremental margin on additional volume next year. That's the way to think about it. So they're there, but it means that as volume comes on, those costs don't need to be added again because they're already embedded in our current run rate. And it's an investment, and I say this a lot. I know it's an investment in the future that allows us to immediately recognize the EBITDA from incremental volume when we get it. Okay. So, but would none of that $38 million have been quasi one-time? It should all be viewed as embedded or? Yeah, I'm being a little bit cagey. Some of it's embedded, and some of it's one time, because some of the costs that... Here's a good example of a ramp-up cost. When you're ramping up, we have to. We know we don't make A-grade products, so some of the product that gets produced as we ramp up is essentially scrapped as we learn to run efficiently. So some of those costs are indeed those very startup costs. But it's a bit too early for me to commit to a precise separation. You're right, though, some of those are inherent inefficiencies that would not be repeated. The rest is fixed cost infrastructure that will be. Okay, thank you. Thank you. One moment for our next question. That will come from the line of Kurt Yinger with D.A. Davidson. Your line is open. Great, and thanks, and good morning, everyone. I guess as you've kind of wrapped up this inventory normalization in Q3, any thoughts on how much of a headwind that's going to ultimately pose to volumes this year? And how have incoming orders trended as you've gone from kind of Q3 to Q4 here? Yeah, well, so for 2023, you know, we're, you know, it's not the easiest thing to settle on a number for what the headwind was, but if you look at historical sales, if you look at some of the inventory reporting we're getting now from distribution, you know, it could be as much as 100 million feet of volume that was sold last year and then moved out of the channel this year, which, you know, has caused the headwind that you've mentioned. As far as where we are today, you know, we do have all customers back in the order file routinely, you know, on, like, on a normal cadence, you know, based on history. And so we feel good that, you know, across the board, across all different channels, that we've worked through the inventory situation, and we're seeing, you know, real demand flow back through, consumer demand flowing back through to our order file. Got it. Okay. That's, that's very helpful. And then, I guess, as you look at, you know, across some of the different products within SmartSide, you know, Expert Finish, the Builder Series, maybe some of the volume that was, was going into the shed manufacturers that was weaker earlier in the year, I, I guess, are there any parts of that that you're particularly excited about kind of growing next year, notwithstanding a big change in kind of the macro demand environment? Or, what do you see as kind of the biggest, kind of, above market growth drivers over the next twelve months? Yeah. So, Kurt, you know, if—if, just say, for the sake of this question, that new home construction's flat next year, R&R spend is flat next year. We're excited, I'm excited about the opportunity to gain market share in repair and remodel due to our Expert Finish growth, the Bath, New York facility, the Holton plant behind it, that's making, you know, product for the Eastern Seaboard, an area where is a highly active siding repair and remodel market, but one where we are underpenetrated. So as we build capability and capacity there and scale, you know, there's just a lot of opportunity for market share gains. Then on the new construction side, we continue to, you know, go to market with our BuilderSeries portfolio of products, which provides us a competitive offering for the builder. While we have, depending on the geography, decent to good market share with smaller regional builders, we are underpenetrated when it comes to the more national players. We're excited about the possibility for BuilderSeries to compete in that environment in a very meaningful way, and us to gain market share next year there as well. You know, shed, we already have really high market share there. We're a bit, you know, we're looking at tweaking that or getting, you know, a few more points. But I think the meaningful growth above overall market growth for us over the next five years or so is gonna be in Expert Finish through repair and remodel, and then with the bigger builders. Okay. All right. Thanks for the color, Brad. Appreciate it, and good luck here in Q4, guys. Thank you. Thanks, Kurt. Thank you. One moment for our next question. That will come from the line of Michael Roxland with Truist Securities. Your line is open. Thank you, Brad, Alan, and Aaron, for taking my questions. I just wanted to follow up on Kurt's question in terms of market share and how you intend to gain market share. You know, it seems like one of your siding competitors are gaining share with home builders and continues to be very vocal about it. You also mentioned last quarter that you're a little underpenetrated with the large national builders. You just mentioned that again, Brad, here. So I just wanna understand your approach with the builders, what you're doing to gain share. And, you know, aside from, you know, market conditions and what had been destocking, is there anything constraining you from gaining more notable share with the builders? No, there's no constraint other than us being new, generally new to that, you know, to that sales cycle. Let me, and I want to caveat that a little bit because we've had decent pull-through with our trim portfolio of products with national builders for a while, so it's not, and it's not like that's alien to us to sell into the big national builders. Also, very strong market share there on the OSB side. So the relationships exist with these big national public builders, primarily through our history of selling OSB products through that channel. But the key to us has been, is having a competitive product, which we do now. The fact that we know, we believe that the product is more than competitive, it's superior. And so, you know, but it's a long sales cycle, you know, in these kind of deals, and we've been working those hard all through this year and are optimistic about the progress we've made. And, as we look forward in the next year, you know, we see that opportunity for growth, as I've already mentioned. And, you know, we are building off... From a lap siding standpoint, we're building off a very small base, and so with the big national builders, so, you know, the ability for us to grow that, what for us would be substantially, is, you know, we're pretty encouraged about. But it's, it'll take time. But you know, the good thing about these deals is that they are, you know, multi-year, or at least single year, at least, and so there is some assured surety of supply once, you know, once you're able to retain it or get it. ... Got it. I I appreciate the color. And then just one quick follow-up on your competitors. I believe one is out with a siding price increase in early January. Is that something that maybe you could use to your advantage, and maybe in terms of trying to gain share, use that against them as they've, my understanding, have been pretty aggressive with their pricing with builders over the last 12-15 months or so? Well, there's two—I'll answer that a little bit more generally than against this one competitor. I mean, obviously, when it comes to these big programs, price or, you know, cost to the whole package is critical to the success there. And so, you know, so yeah, I mean, if a competitor has a higher price than us, then that box gets ticked in our favor as we work these deals. But typically, that kind of always gets worked out in the back end anyway. And so really, you know, where we're trying to compete is off our value proposition, which is the quality of the product, the aesthetics of the product, and the ease of installation. And so, you know, that's what—that's how we lead. And then obviously, though, at the end of the day, we've got to be competitive on price as well. And as I've mentioned, probably, you know, 100 times, already 4 or 5 times on this call, we finally have a product, you know, we're able to be competitive on pricing as well as bringing all the other advantages of a SmartSide, you know, to the builder conversation. Got it. Thanks very much, and good luck in fourth Q. Good morning.[crosstalk] Thanks, Mike. Thank you. One moment for our next question. That will come from the line of Susan Maklari with Goldman Sachs. Your line is open. Thank you. Good morning, everyone. Thanks for taking the questions. Morning, Sue. Good morning. My first question is, you know, last quarter, you had mentioned that you saw a fairly substantial decline in shed demand during that quarter, and that was part of, you know, what was going through, that siding segment. Is there anything that's changed or that is impacting the business as you think about the fourth quarter guide there? No, the shed business has rebounded a good bit from what we reported for what would have been Q2 results. I would call that back to more of a normal cadence there. I do think there, from just overall demand in that channel has been suppressed this year a little bit, given how active it was last year. But, we feel good. I'll reiterate, all those customers are also back in our order file, and so we are seeing, you know, pulls in shed. And then typically, it does, there is a little bit more of a pull this time of, from now on, as folks build some inventory in preparation of the builds they do to have product to sell in the spring. So typically, late Q4 to early Q1 are pretty strong product pulls in that segment. We're expecting similar, expecting to see that increase in demand as we look forward. So I would call it back to normal, though I will say, compared to all the other channels, normal is probably still a little less than what the kind of demand we were seeing in 2021 and 2022. Okay, that's helpful. Sue, could I just- Sure. I was, I wanted to add something for the general audience as well. The Q4 revenue guide for siding does include the fact that we are limiting pre-buy in advance of our January price increase, partly so that we don't have a repeat of last year, where it limited our ability to read the market. So the Q4 guide does include a limit on pre-buy. Okay. That, that's helpful. Thank you for that. And then maybe turning to OSB for a minute. When you think about that segment and sort of the more recent trends there, they seem like they're a bit in contrast to what we are seeing from especially the large, big public builders and their tone as they think about 2024. Can you just comment a bit about the channel inventories in OSB, including, you know, perhaps some of your Structural Solutions products in there? And how you're thinking about the potential for those volumes to move over the fourth quarter or maybe even into the early parts of 2024? Well, look, inventory situation for, in the channel for OSB remains, I would say, normal to slightly lean. Currently, as of today, you know, that can change pretty quickly in the OSB world. So I know, I know you understand. But, I would, you know, unlike siding, there's really never was any meaningful OSB inventory build. I mean, it can happen over for two or three weeks at a time, but, typically, you know, our order file is staying, you know, pretty normal right now. So, you know, we're not extending it, we're not shortening it. And so, I feel good about where inventories are. I mean, I do think there, there's gonna be some seasonal component to demand with the builder beginning Thanksgiving, the week of Thanksgiving through probably, you know, the first couple of weeks of January. That's normal of what we've seen historically, you know, the pre-COVID year, before COVID, you know, screwed all seasonality up for us. So we, you know, I would not be surprised to see the OSB demand declined, you know, but, but again, around the Thanksgiving timeframe, typically, our channel partners are gonna want to cross the year with as lean inventories as they can kind of live with. So we also get a little bit of that, negatively impacting demand. And then, you know, we typically get a pop once folks are back from the holidays and then start looking forward to the spring, building season. So I'm expecting for both siding and OSB for normal seasonality to return this year. We have not had that in over the last three winters, so we're planning accordingly. We obviously have the ability to respond in both businesses, either up or down, as demand, real demand becomes apparent. But I can see, personally see a building slowing, you know, from middle of November to middle of January. Okay. That, that's really helpful color. Thank you both, and good luck with everything. Okay. You're welcome. Thanks. Thank you. One moment for our next question. That will come from the line of Ketan Mamtora with BMO. Your line is open. Good morning, everyone. Hey, Alan, just one quick clarification to what you just said. So should I read this as, you guys are already out in the market with a January price increase on siding? Yeah, I'll, I'll answer that, Ketan. We, we have communicated to the channel a price increase is coming. We'll be communicating... You know, those, those are highly tailored by region, by channel, and so that, that specific communication will be going out over the next couple of weeks. It, it is a January 1 price increase, and as Alan mentioned, we're doing it a little different this year in the way we're, we're implementing that. Historically, we have allowed our channel partners to buy 110% of their, you know, kind of normal purchases, like prior six months or something like that. We'll pick a timeframe and then say, "You can buy 110%." We're doing this year you can only buy 100% of your prior purchase history as a way to mitigate the probability of us building you know our pre-buys impacting Q4 positively and Q1 negatively. And also that allow us to realize pricing quicker you know with on that volume. So yes an increase is being announced for January 1 and the other meaningful piece of news there is that we're of the way we're kind of trying to manage the pre-buy out of existence actually by limiting the purchases prior to the price increase. Got it. That's, that's very helpful, Brad. And then, just one quick follow-up on OSB. What was your kind of operating rate in Q3? And, you know, whether it's, it's fair to assume, that, you know, those curtailments that you all took outside of Sagola continues into Q4? We were running about 80% of capacity, or ran about 80% capacity in Q3. In Q4, we're planning for that or a little lower. I would say probably with more downside than upside, as the way I responded to Sue's question. You know, if we really see a demand slow down in the latter half of the quarter, you know, we'll plan to take more capacity out as we balance our capacity to demand. But that's how we're planning to operate during the quarter, and we will make sure that, you know, we satisfy our customers' needs, but not get out of balance to that, the demand that we're filling in our order file. Got it. That's very helpful. I'll jump back in the queue. Good luck. Thank you. Thank you. One moment for our next question. And that will come from the line of Sean Steuart with TD Securities. Your line is open. Thank you. Good morning, everyone. Question on input costs. Can you give us a sense of variance versus Q3 for fiber and resin that's embedded in the Q4 guidance? And any context on trends you're seeing headed into 2024 on that front? Well, generally speaking, trends are favorable, as we head into Q4 and 2024, but we're cautious forecasters, so we generally don't bake in any sort of further improvement, meaning we assume that input costs are going to hold roughly at current levels, as we forecast from Q3 to Q4. So if they improve, there's a tailwind there. Okay. Thanks for that. And just, one question on modeling. The siding price realizations this quarter improved a little bit sequentially, which is encouraging. How much of that is just a mix issue as the inventory bubble progressed through the quarter? Was there anything more to it than that, in seeing that modest improvement sequentially? Yeah, yeah, it's mostly— It is mostly mix. So, you know, strong distribution business relative, which has particularly good pricing. Expert Finish held up nicely, things like that. So it's, it's— There was no. ... Q2 to Q3 price increase, so it's fundamentally, the continuation of that favorable mix from Q2 to Q3. Got it. Okay, the rest of my questions have been answered. Thanks very much, guys. Thank you. One moment for our next question. That will come from the line of George Staphos with Bank of America. Your line is open. Thanks very much. Hi, everyone. Good morning. Thanks for the details, Brad and Alan. I wanted to talk a little bit about siding. So you mentioned that you are eliminating the ability for your customers to buy somewhat ahead of your price increase coming in January. Are there any other changes that you're making with any of your commercial strategy or distribution strategy that you could relay on an open mic call, you know, to continue the progress into next year? And relatedly, you know, with one of the other analysts, I think Mike, was talking about, you know, your peers also saying that they're growing. You want to grow market share with the large builders. You have the BuilderSeries product. How do you ultimately make the progress you wanna make towards that 25% margin, given that product would typically have, I would imagine, you know, perhaps a little bit lower margin, and you're trying to gain share? I know it's gonna be around selling the value, but wanna hear additional thoughts there. So any, any changes in the commercial strategy, and how do you, you know, get to the margin you want, given what you wanna get to in terms of your share with builders? Thank you. Yeah. So let me do the commercial first, and I would say that, you know, during COVID, being on allocation for all of 2 years, maybe a little more than 24 months, you know, we've consciously cut back on our marketing spend, as we were sold out, you know. And so, we were focused more on reallocating, you know, assets and resources that helped us optimize that order file versus, you know, getting into a growth and market share gain mindset. And so as we roll into next year, you know, and pulling our budgets together, you know, we're gonna allocate more resources to demand creation and a growth mindset versus how we've managed the business over the last couple of years. And that will be certainly in support of our Builder Series products, as well as our repair and remodel products. And everything what we do in retail, you know, across the board, really leaning into you know, the new market condition here, which is in a flat to slightly growing housing market. You know, we need to get more aggressive on share gains. On the margin question, you're generally right about the way you're thinking about lap siding sold into the big builder. I will say, compared to prior years, though, and I've mentioned this several times on the call, you know, the Builder Series was engineered to be competitive there, so it's not a ginormous margin hit for us to you know, skew volume there. But really, where the offsetting... Two offsets to any margin that we, you know, have to give up to secure a big builder business. First of all, repair and remodel is not that way. It's a value sell. We're selling Expert Finish, you know, and the opportunity to gain market share through gain margin by increasing our market share and repair and remodel can be a significant offset. Second to all that, you know, Sagola, as an example, on the manufacturing side, you know, Sagola. Take Sagola or take Bath, New York. Both of those are large mills, high scale mills, low cost mills, compared to our average. And so as we ramp up the, you know, these bigger pressing facilities or pre-finishing facilities, we're also seeing opportunity for cost reduction that will meaningfully impact, you know, our margins going forward. So, you know, it is a constant area of management and analysis around, you know, pricing, margin, cost reduction, OEE, and, you know, we've gotten way more sophisticated on how we manage pricing, you know, by channel, by customer, in some cases. So I'm confident that we'll manage it well, but I'm equally confident that, you know, our ability to get meaningful margin in this business is not gonna be, you know, it, you know, we've always had a spread of low margin to higher margin, SKUs in our portfolio. You know, if we add, hypothetically, say, BuilderSeries is on the lower side of that, we've got plenty of opportunities on the upper side of our portfolio to gain margin, especially when you couple that with a more efficient operating platform. Sure. Brad, just quickly on distribution, any change in terms of the way you're gonna approach 2024 versus 2023, or pretty much the same approach? And you know, from my vantage point, maybe simplistically, maybe a little bit more of a one-step versus two-step. Thank you, guys. Good luck in the quarter. Yeah, George, you know, we've talked about, we have set up DCs in some major metropolitan areas to provide more of a direct model. That is largely driven by the focus on the builder, though other customers benefit off that as well. So that, I would say that is not new for 2024. It was new for 2023. But we will continue to focus on optimizing that and pushing volume, you know, through that more direct path. And we're only doing that to be more efficient in delivering, more efficient from a cost standpoint and responsiveness, delivering product, you know, into strategic customers that, you know, need that level of service, and obviously, honestly, you know, at some cost advantage. But as we look into 2024, no major changes in the way we're going to market other than continued growth, you know, in that more direct selling model. Thank you, Brad. Thank you, Alan. Thank you. Thank you. One moment for our next question. That will come from the line of Paul Quinn with RBC Capital Markets. Your line is open. Yeah, thanks very much. Good morning, guys. It sounds like the two big levers to run a successful siding operation are this penetration of the big builders and the rollout of ExpertFinish. So just on the big builders, is there... Just so I can kind of increase my knowledge on what you're doing. On BuilderSeries, is there a, you know, a regional penetration difference? Like, you know, are you making more gains in the south than the northeast? And in terms of the manufacturing of that product, is that done at all your siding mills or only a couple? On the manufacturing side, Paul, it's done at our 24 foot press mills at Dawson Creek, British Columbia, being primarily where we're sourcing it now. Sagola will have that capability or does have that capability. Obviously, a little bit closer to market there as well, which will help on the cost and margin side. But it's the most recent presses that we have converted, which are 24 foot in length, 'cause that, to remind everybody, the Builder Series is 12 foot. Our normal lap SKU historically has been 16. Okay, and then you ask about penetration. Well, you know, with the big national builders, you have to go where they are. And if you look at the smile of the country, that's where, you know, a lot of the housing starts that are being driven by the big national builders are in that smile. You know, we have had historically good, pretty good penetration in the Texas, Colorado markets, but just because of our SmartSide history there. So where we're focused on penetration, it'd be the more South Central, Southeast, Atlantic, Seaboard, as opportunities for us to really, you know, gain market share. And just to round out that question, Paul, I would say on from the central part of the country, we've been strong there, even with our 16-foot product offering, with the bigger builders. So obviously, we're, you know, that would be a sweet spot for us to pick up incremental business. But the big, the big potential, opportunities for us to gain volume is in South Central, Southeast, and Mid-Atlantic. Okay, that's great. And then just, on the Expert Finish side or R&R, how should we think about that progression of margin uplift and volume through that? Is that, do you expect that to be slow and steady gains, through 2024 into 2025? Yeah, it's probably more slow and steady than big bang. Other than to say, and we've the finishing line we've put in to Bath, which we put a similar line into our existing facility in Green Bay, and we're seeing economies of scale, that's the right term, that are exceeding expectations. And so as we ramp those up, that there will be somewhat of a step change in margin. I think by the time, you know, you run it through our, you know, all the siding that we sell in a quarter, it might be a little bit harder to see, but it's coming. And as we learn how to do this at scale, and we just see a lot of opportunity for incremental margin above, you know, the decent margins we're enjoying today. Okay. And then just lastly, if you get South America looked a little weak in the quarter, what can we expect going forward? Yeah, I mean, that's a South America right now is a good solid business. Economically, across that whole continent, unfortunately, right now, there's a lot of political and economic unrest, so we're winning where we can. But there's no alarms from a market share standpoint. I mean, honestly, from a, you know, kind of as chaotic, if that's it might be a little bit too strong of a word, but the chaotic economies down there are kind of discouraging import volumes there. So we're from that standpoint, you know, that's been a little bit helpful. But pricing is really challenging in all the countries there. We have taken a significant capacity outages across our operations down there. So, you know, we are pedaling really hard to hold our own in South America, waiting for all that to turn, which, you know, in our 25 years down there, it's been that way, a little bit cyclical economies can get out of kilter, and that's certainly happening right now. So we're optimistic on the long term, but I think we should be thinking about next year being somewhat similar to this year as far as the earnings potential down there. Yeah. as we work through these economic headwinds that are facing basically all the economies we operate in down there. Could I add one, one other thing? At the risk of opening a can of worms, we did transfer Entekra assets to South America, and the cost of transferring them, packing, shipping and everything is non-capitalizable, if you're interested, and therefore, the cost of doing so is reflected in the EBITDA. That's $2 million-$3 million in Q3. That was a quote, I use the traditional phrase, that a one-off, but we left it in their EBITDA because the corporation is always moving equipment about as a whole, so there's no reason not to include it in EBITDA. So that put a made a tough environment appear slightly worse than it really is. Okay, great. Thanks for the color, and best of luck. Thank you, Paul. Thank you. Thanks, Paul. Thank you. That concludes today's question and answer session. I would now like to turn the call back over to Mr. Aaron Howald for any closing remarks. Okay, thank you, operator. With no further questions, we'll end the call there. Thank you for joining LP for our third quarter earnings call. Stay safe, and we'll look forward to connecting again soon. Thanks, everyone. Thank you all for participating. This concludes today's program. You may now disconnect.