Ladies and gentlemen, thank you for standing by, and welcome to the Louisiana-Pacific Corporation Fourth Quarter and Full Year 2020 Earnings Results Conference Call. At this time, all participant are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. .

Please be advised that today's conference is being recorded. . I would now like to hand the conference over to your speaker today, Aaron Howald, Director, Investor Relations. Thank you. Please go ahead, sir..

Thank you, operator, and good morning, everyone. Thank you for joining us today to discuss LP's results for the fourth quarter and full year of 2020 as well as our Q1 outlook. My name is Aaron Howald, and I'm LP's Director of Investor Relations.

I'm joined today by Brad Southern, LP's Chief Executive Officer; and Alan Haughie, LP's Chief Financial Officer..

Thanks, Aaron, and thank you all for joining us this morning to discuss LP's results for the fourth quarter and full year 2020. As you all know, the housing and repair and remodel markets that LP serves continue to show remarkable resiliency despite the ongoing COVID-19 pandemic and demand for our products has remained very strong.

Q4 was another record for SmartSide as sales increased by 30% to $259 million and Siding EBITDA nearly doubled over year-over-year to $77 million. OSB prices remained exceptionally high throughout the quarter, resulting in $250 million in EBITDA for the OSB segment. All business segments continue to demonstrate outstanding cost control.

As a result, LP ended 2020 with $2.8 billion in sales, $781 million in EBITDA, $660 million in operating cash flow and $4.31 in earnings per share. It was a very strong ending to a uniquely challenging year that leaves LP well positioned for continued growth. Two years ago, we introduced a strategic transformation plan for LP.

That plan included a 3-year target of $165 million in cumulative EBITDA improvements from growth, operating efficiency and strategic sourcing. Today, I am proud to announce that we have exceeded this target a year ahead of schedule with $177 million in cumulative impact delivered in only 2 years.

I want to stress that we measure these results using normalized OSB and raw material prices. So this achievement is not merely an artifact of unusually high OSB prices or favorable movements in the cost of logs or resins. Rather, it is a result of the incredible dedication, creativity and grit of our sales, operations, logistics and sourcing teams.

Having achieved significantly greater efficiency, we will not only hold those gains, but raise the bar as we continue to drive our growth and value creation strategy..

Thanks, Brad. Slide 8 shows summarized results for the quarter, which are very clean and straightforward. Net sales increased by 60% to $860 million, primarily due to 30% growth of SmartSide and $246 million of higher OSB prices.

The resulting EBITDA of $328 million is 7 times last year's result and translated nearly dollar-for-dollar to operating cash flow of $321 million with the benefit of $45 million in tax refunds. We further lowered our year-end share count to 106 million shares after spending $171 million in the quarter to buy back a little over 5 million shares.

And with taxes as the only meaningful adjustment to net income, adjusted earnings per share was $2.01 compared to U.S. GAAP earnings per share of $2.34..

. Our first question comes from the line of John Babcock from Bank of America..

Sorry, now I was just wondering if you could talk a little bit about -- so you shared some information on the Houlton mill.

Just what's attractive about the Sagola, Michigan mill, whether that's the wood basket or other factors and also I was wondering if you might be able to provide some sense as to what that conversion might cost?.

Okay. John, did you ask the first part of that question was some of the specifics about why Houlton and then why Sagola? Was that the....

Yes. Sorry, I didn't ask that well. I mean, basically, I was just wondering with regards to Sagola.

What makes that mill attractive for a Siding conversion just because I don't remember that being mentioned in the past? And then also, if you could just kind of talk about the capital cost for that?.

Okay. So from a Houlton standpoint, probably the primary attractive part or #1 on the list is the fact that it's located in the Northeast. As we've mentioned on earlier calls, we are targeted repair and remodel as a key focus area for growth in Siding and that Northern and Mid-Atlantic region of the U.S.

is a really strong repair and remodel for Siding, very strong repair and remodel market. So that is what really got us focusing in on Houlton. And then also, we do net present values of these conversions.

And to a certain extent, Houlton was more optimal for us because of the LSL capacity there, not producing the kind of returns that we see in our OSB mills. From a Sagola standpoint, great wood basket as well. We do like making siding in the central part of the country.

It's pretty -- most of our mills are there, but that central location allows us to access the West Coast, the Central part of the U.S. and the East pretty efficiently. And also, the press size for that mill is a good press size for Siding conversion.

I would say, from a capital standpoint, just look back at what we spent on Dawson and Swan, it's a very similar mill configuration to what we have in Sagola.

And while we haven't made the decision on the finishing capability, we want to put into that plant because -- and that can impact capital cost, if you plan around a range of what cost us to convert Swan and Dawson, that would be good guidance for where we are right now..

Okay.

And then with regards to the Peace Valley OSB mill, I was just wondering if you might be able to provide some sense as to, first of all, why this was one of the mills that was curtailed a little while ago, just so we have a little bit of kind of just what's around that? And then also just general, how we should think about the economics of that? And on a forward base, how you're going to consider whether or not to keep that running? It sounds like it's something that you have in your longer-term plan, but just want some more color on that..

John, that's a great question. So at the time -- 2 factors on the shutdown decision that are worth mentioning. First of all, at the time of the shutdown, the Western Canadian OSB pricing zone was one of the worst zones, if not the worst zone for selling OSB. There was a good bit of capacity added to that region over the last decade or so.

And so we were looking at really low pricing there. And then candidly, we have struggled from a cost management standpoint at that mill in the past. And so when we look at those 2 together, it was a rather -- I mean, it wasn't a slam dunk decision.

When we looked at our work on which mill to shut down, but it certainly became rather obvious over through the analysis to that's where we wanted to concentrate the shutdown. And also being one of our larger mills with a capacity of 100 million square feet, it was with significant reduction in volume.

Now why are we confident for starting it up? Well, the pricing dynamics has changed across the various OSB regions, but also the $10 million in capital and the $12 million overall we're planning to spend to restart the mill is focused on some of the bottlenecks that we've experienced in that facility that had limited our ability to hit the cost position that we want to, with the scale of that mill, it should be, and it was originally designed to be one of the low-cost mills in the OSB industry, certainly within our network.

And we're confident, given our experience with OEE across our other facilities, and I will -- a bit of a detail, but also our experience over the last couple of years in reducing the cost at Peace Valley sister mill, which is our Clark County, Alabama mill, we're in a position to get that mill to be a very low-cost producer in our network and overall for the OSB network.

So we're starting this mill up with the expectation that we would run it for a long time. And as we look forward into the next downturn, we would look overall at our entire network and optimize accordingly, but our expectation is we can get Peace Valley to a really good cost position..

And just adding to that, will you have any notable change in the product mix that comes out of that facility?.

Not from the time when we shut it down. We -- that has been a really good TechShield mill for us, and we basically lost a good bit of that volume on the West Coast because it was inefficient for us to replace it all from the East. And then that's also a long press. So we make long length panels there, that is unique for us.

We can only do that in Clark and Peace Valley. So we are excited about bringing those Structural Solutions products back into the portfolio on the West Coast with our Peace Valley operation..

And then just last question before I turn it over. I was just wondering, you've done really well with the transformation targets and achieving both your growth and efficiency goals there.

Will you be able to provide some color on how you're thinking about that for the year ahead? I think you've touched already enough on the growth side of things, but on the efficiency side, it might be useful to have some more color there..

Well, the combined target for this year, and this includes the Siding growth, though. The combined target is $75 million of improvement for this year. And we certainly have plans to extend that beyond this year, I want you to know.

We still have, in OSB and Siding, this is for memory a little bit, but 2 to 3 points of percentage points improvements in OEE out there just to get a sense of the -- across the board, in the 90% OEE, which is our original target for both businesses. And then we're also always working on sourcing savings.

So I want to be clear that we're reporting that we hit year 3 target in year 2, but that annual kind of pace that we're on as far as improvement, we are extending fully into the future.

And we'll continue to discuss that on these calls, but -- and when we talk about -- sorry, Siding growth, Structural Solutions growth, improvements in OEE and sourcing savings. So those are the 4 key areas.

There's a little bit of SG&A management in there as well, but those are the 4 key drivers to -- that have got us where we are today and where we continue to focus as we move into the future..

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

Brad, Alan, congrats on a very strong finish to the year. First question, can you talk about the growth that you saw in Q4 and maybe fiscal year 2020 in ExpertFinish? I know you wanted to get it over the next few years, maybe 1/4 or 1/3 of your total sales.

Can you just remind us where it is in terms of your total sales right now in Siding?.

Well, Ketan, it's about 5% of our total sales in Siding. It was our fastest-growing product line in Siding. I mean, obviously, from a small base. So -- but it's growth basically from zero to 5%, and it is a clear focus area for us for this year and onward as we continue to grow in the repair and remodel segment..

Got it.

And how much headroom do you have in terms of capacity with the 3 facilities that you currently have for prefinished siding?.

Yes. It's a good question. Certainly, we have enough headroom for this year's budget to hit it. But Ketan, the thing about that is that those additional tapelines either at our existing, preexisting facilities or greenfield are relatively inexpensive and quick start-up type capital projects.

And so I don't see -- ever see any issue with us being constrained on prefinished capacity as we move forward. Let me just add on to that question that given the fact that we will have Houlton making lap siding next year, we will have a decision to make on where to concentrate that Northeast production for prefinish. We haven't decided on that yet.

And that solution could include us continuing to do it in our North Carolina facility but really focusing in on that as we go through the year and understanding optimal place to produce that will be important to us.

Don't think of prefinished capacity as being certainly a financial constraint for us because it's pretty easy to add on lines at our existing facilities and they all have the space where we can do that pretty efficiently..

Got it. And then last question. You have $30 million to $35 million CapEx on strategic growth projects. And I thought I heard Alan also talk about some new products.

So maybe if you can just highlight those 2 things what you're looking at in 2021 and beyond in terms of some of the new product launches?.

Yes. One of the larger consumers of this strategic capital, other than Houlton conversion, is we make a shake product out of strand siding that we've currently been making that product in our North Carolina -- Roaring River, North Carolina facility. We make the panels for that product, the substrate of that product is one, River Manitoba.

And so we're going to put a shake machine in Swan to help to increase the capacity -- significantly increase the capacity of our shake product. And also, obviously, that puts it in a little more Central location as far as reaching the West Coast and the Upper Midwest.

And that is a really -- it's a beautiful product and a really high-margin product for us. And so that would be a really good example of how we're using capital this year to grow the product portfolio..

Our next question goes from the line of Mark Connelly from Stephens..

Just 2 things.

Are your WeatherLogic and FlameBlock products available in all of the markets where you sell OSB? I assume that TechShield isn't because the value would vary by region, but I'm just curious about the rest of your Structural Solutions?.

Yes. FlameBlock, yes, is available in all regions. And WeatherLogic has been a little bit constrained more from a capacity standpoint than any kind of geographic limitations, but we're going into this year with full capability to supply the market for WeatherLogic. There was some constraints last year, though..

Okay. That's helpful.

And then just quickly on the business that you're exiting the fiber siding and CanExel, how much of that business were you able to convert over to SmartSide strength? I'm just trying to understand how much of your strand business was able to capture existing customers or is it all had to come from mill?.

Mark, that's a good question. So from a CanExel standpoint, while prefinished is obviously a focus area for us, you may recall that, that product line is in kind of an Eastern Canadian and Europe -- European focused. And we haven't really focused on that or made a hard push to convert that business.

I'm not saying we're not picking up some around the edges, but that's not been a focus area for us. Conversely for the fiber production, especially the fiber production that was in retail, that has been a focus area. We did not want to lose the shelf space that we had earned over the years for the fiber panel that we had in there.

And so we have been actively converting that volume when we can over the strand..

Our next question goes from the line of Paul Quinn from RBC Capital Markets..

Maybe just spend a couple of minutes on Siding here. Just taking a look at Slide 7 with the capacity additions, it looks like your graph is based off that 11% volume CAGR. You did the 26% in Q4 and 13% in 2020.

So are we being conservative on the 11%? Is it accelerating? Is it decelerating?.

Well, Paul, obviously, it's accelerating over the last little while. And as we look into next quarter, I don't think 35% is sustainable year-over-year and -- but the changes that we've made in distribution and the new products that we've offered from a volume standpoint, I mean, I think 11% is a good number.

We are watching from a timing standpoint, that very closely and will -- and adjust the Sagola timing accordingly. If we feel like that we're up to the more 15% annual volume growth right now, I'm talking not just revenue. Obviously, volume is what's important for capacity.

So I mean, I feel good about where we are from the timing of the Houlton conversion. I mean, I wish that was a little bit bigger mill to convert, but that's the reason for going ahead and getting started on Sagola. So I feel good about it.

But as you point out, there's not a lot of headroom from a capacity standpoint, if we're continuing to grow volume at a 15% rate or so over the next couple of years. We would stay pretty tight until we could get the Sagola conversion..

Okay. Great.

And then maybe, Brad, if you could give us some color just on where you're seeing that regional volume growth? And then also, what's anticipated for the finishing end at Houlton?.

Yes. So I mean the Houlton will be the LAP and Trim, primarily LAP and Trim play for us, so the 16-foot product.

And then where we're seeing the growth in distribution across the board in all geographies and then what's been really, really healthy for us and we've talked about this, Paul, that over the last couple of quarters the retail business, as Alan reported, has really been, I mean, just unbelievably strong.

From a growth standpoint, we've done a really good job of getting shelf space there, retaining it and then adding SKUs. So that's been very helpful. And then our shed business, after being really, really, really slow at the beginning of COVID, has really taken off.

And so we're moving a lot of panel through distribution and get it into the shed manufacturer. So I would say, LAP and Trim into new construction and R&R has been a little stronger than we would have expected. And then the panel products through retail and into shed has just been really, really strong..

Yes. And just lastly, just over the last 3 or 4 years, you've introduced a number of new products into that Siding segment with a smooth product, you've got WeatherLogic, you've got fencing.

Just wondering what you're seeing, what are the big takeaways from that? What's worked? What hasn't? Where do you go with new product launches?.

Okay. Let me back up to the -- what's worked, and then I look forward. I mean, what's really been really, really solid for us on the OSB side has been Legacy Flooring and FlameBlock has been really good. We’ve learned from the WeatherLogic experience, we really need to have a rounded portfolio of that product, which we rounded that out last year.

So we feel really good about -- I mean, we had good growth in where the launch last year, but somewhat constrained by us not having the full portfolio. We've remitted that, and we're really ready to rock and roll that product offering as we move into this year. On the Siding side, man there's been a lot of good products.

When you're talking about smooth and prefinishes from a really small base, but the market acceptance of that and really the need as we push into R&R, has made the growth of it really strong. And I foresee continued strong percentage growth in those products because of -- again, because of a smaller base.

But to go from zero to 5% penetration with expert finish, I'll call it out a win. And so it's -- so we back up and look forward, really to get the kind of double-digit growth that we talk about in Siding, we've got to continue to be really innovative. Fortunately, our product is very adaptive to innovation.

And so as we continue to build out the portfolio of repair and remodel type products, which, by the way, shake is one of those that I've mentioned earlier, and then really focusing in on getting competitive on the big builder side with a product that we're going to be launching this year, those are the kind of really targeted new products that can either fill an edge or provide a real platform for growth.

And there's no insight to our innovation initiative here because that's how you get double-digit volume growth is through a big emphasis on new products. So I just -- what I'm communicating is don't -- there's not an end game on new products on SmartSide. We've got to really continue to be innovative to hit these numbers, and we intend to be so..

Our next question comes from the line of Mark Weintraub from Seaport Global..

Brad, in 2020, I think you produced about 3.54 billion square feet of OSB, just under 1.4 billion in Siding.

With the various actions that you're taking, assuming demand is very strong as it certainly seems to be, how much OSB do you think you could be producing in '21 and similarly for SmartSide?.

Okay. So there was some downtime that we had in OSB in Q2 and anticipating COVID-related issues that didn't really materialize. So from -- for OSB potential capacity in 2021 is -- Aaron, go ahead..

Yes. The COVID downtime was about 100 million feet of total taken out and the capacity for 2021 will be similar plus whatever ramp-up we see in Peace Valley..

And then on the Siding side, we've got -- basically, the capacity is about 400 million square feet a quarter. We do have a press rebuild at Swan schedule for Q3 that could take that mill down for potentially for a month, including the ramp up time.

But other than that, that's the only schedule -- big scheduled downtime we have other than the ordinary maintenance downtime..

Okay. And just to make sure I'm reading the Slide 7 right.

So is Peace Valley, does that ramp begin at about mid-year or when is that ramp schedule to begin?.

So for this chart and really, Mark, the earliest we could see production in Peace Valley is Q3, and there wouldn't be a lot in Q3. So we're really looking at Q4 as the first full ramp-up quarter. And then as I mentioned sometime late Q3 or Q4 of 2022 was when we would be expecting to hit full capacity there..

And then on the cap allocation question, thanks for all the color, et cetera. So last year, cash from operations, $660 million.

If I look at what you've laid out, the $230 million -- $220 million, $230 million for CapEx, you have about $300 million share repurchase authorization and then dividends are order of magnitude $70 million a year, that gets to about $600 million. Right now, you're doing even better than last year as per your first quarter guidance.

If you are generating anywhere close to or even more than what you did this year, what do you think happens with the cash flow above that $600 million that's sort of been allocated already?.

Yes. We still believe that the company is significantly undervalued. So we will continue with our shareholder-focused strategy of fundamentally returning excess cash to shareholders. And it's -- you're right in your assumption that the current $300 million share buyback authorization would -- could well be exhausted rather rapidly.

So yes, that cash flow will ultimately be returned. We're not going to hold cash in..

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

Just starting on the Siding business and growth.

As we look back, I guess, at the back half and the Q1 guide, is there any way to kind of bucket some of the different drivers there between what you would view as underlying market growth, distribution wins or benefits from new product introductions?.

Yes. Well, this is a bit of a -- this is an estimate on my part, but I would say the underlying growth, it's happening right now across new construction, repair and remodel could be in the range, that 20% of -- 20% year-over-year and then what's accelerated the growth for us above that has been the strength in retail and the strength in shed.

So does that answer your question, Kurt?.

Yes. Yes. No, that's very helpful..

Well, the -- yes, and from a percentage standpoint, the growth in ExpertFinish and our penetration in R&R is -- from a percentage standpoint also is disproportionate because it's off a smaller base..

Right. Right. Okay. That makes sense.

And I guess, just sticking with ExpertFinish and growing that out, is that something where you need the finishing assets in each geographic market? And could you just remind us what markets, I guess, you introduced that in, in 2020, and where you're really looking to expand that here this year?.

Yes. Great question. So we had -- we started with our first manufacturing base in Green Bay, Wisconsin, obviously, near our mill network then we quickly expanded into -- with a facility in St. Louis and then we expanded within our facility at Roaring River, North Carolina. So that's the current footprint.

And you can tell from that footprint, we're very focused on the Eastern part of the U.S., including the Upper Midwest, but all things East. But we are -- we do sell prefinished in the West, but we use an independent prefinished network there that we have relationships with.

Right now, we've made that decision because of just the geographic expanse of the West Coast has made it. That is the more logical step for us currently. So our focus in the near-term is on the East Coast with our footprint.

And if you think about what I just described, that's why us understanding the best way to access that upper -- that Northeastern segment is something we need to -- we're working on, but that's the current network. And we would be and are looking at options to acquire facilities in place or build our own.

But overall, I would say that other than the upper part of the Northeast, we're not really limited in our ability to grow prefinished right now in the East because we get pretty good coverage from our network -- our existing network..

Got it.

So that would be something that distribution would just have it branded as their product and to the extent you chose to add capabilities in certain markets, you could bring that under kind of the LP banner, is that the right way to think about it?.

Yes. So ExpertFinish is everything we sell out of the facilities we have, the 3 that I mentioned is branded ExpertFinish sold as one LP product offering into the distribution network that we have. On the West Coast, those tend to be more their brand and like they'll say, SmartSide -- their brand coating SmartSide.

So the -- where we make it, we want to control the brand name and do, and that's how we've been operating to date..

Okay. Makes sense. And lastly, and I apologize if I missed this, but you talked about Houlton's OSB capacity at about 250 million square feet.

What's the right way to think about what that mill was actually producing? Is it similar to that?.

No. It was less than that. Go ahead..

Kurt, this is Aaron. That mill produced both laminated strand lumber and OSB and the volumes of those ebbed and flowed. But it has been a while since Houlton produced its full capacity as oriented strand board.

We're just describing that capacity in apples-to-apples terms so that people really understand the context of the capacity impacts of that conversion..

Our next question comes from the line of Sean Steuart from TD Securities..

Just a couple of follow-ups. I appreciate all the thoughtful answers so far. On the Siding conversion front, I mean, it doesn't sound like you guys have really seen any cost inflation for these conversion projects and a bit of an apples-to-oranges comparison. But in the lumber industry, we have seen inflation for large-scale sawmill rebuilds.

So I'm wondering any context you can give there? And then you touched on your NPV analysis for these types of projects.

And I'm curious if you can disclose how returns on the capital you're deploying to these conversions have trended? I assume it's positive, but any context you can give on how those returns have moved over time for these types of projects?.

Sure. Well, from the capital cost inflation, I mean, obviously, that is a factor in these rebuilds. But even though we kind of have found this range of conversion costs, it's been pretty consistent.

There's a lot of moving parts within the project between the different facilities, what we have to do from a building standpoint, or in the case of Houlton where part of this is a press rebuild that other 2 projects didn't require at time of conversion.

And so we -- it's funny, we've kind of hit on this $120 million to $140 million that we've gotten there on each of the last 3 conversions from a different way.

So I would say that, in some cases, that inflation has been offset by maybe less of a scope in the subsequent project, but it's not a material -- I do want to say, no, it's not a material issue that there's some component in these conversions that have just really escalated from an inflationary standpoint.

From a return standpoint, these conversions have been great. When you -- for 2 reasons, one is our ability to continue to get pricing hasn't always been baked into our pro forma as aggressively as we’ve been able to get it.

And then because of the strength of our Siding growth, we've really filled these plants up really quickly from a utilization standpoint. And so they've been really good returns. And I think those returns, there's evidence of that if you do ROIC on our Siding segment. It's really strong. So we like these conversions.

And typically, as is the case with the 2 we announced today, we're converting rather high cost OSB mills. And then because of the scale of a mill likes to go, it's going to be a really low-cost siding mill. So we get the kind of double, we’re taking up a high cost OSB mill and turn it into a high-return siding mill..

Understood. And last question for me.

The 25% EBITDA margin for Siding that you're targeting, which has crept higher over time, is the increment there just that much more market tension and your ability to move prices higher over the long run or is it optimization of operations and taking unit costs down over time? Any context on what's driving that gradual improvement to the margin trends?.

Yes. Both things, there's 3 parts of that -- 3 parts to answer. First is our ability to continue to get price improvement every year. Secondly, ROE initiative around Siding has been just outstandingly executed. So we're running the mills much more efficiently.

And then thirdly, to the previous answer, we are converting -- adding mills to our network over the last 2 that have been relatively low-cost mills into the network. So once we get a mill like Dawson up and running, our overall cost profile for the network is lower by that.

And -- well, and then a fourth part of that answer is that Dawson has provided some logistics optimization around being present on the West Coast. So we get a logistics optimization or improvement as well.

So it just comes from the investment pays off from a cost standpoint and then our ability to get pricing historically has both spread the margin for us very nicely..

I would add that the business has a phenomenal operating leverage. And if you look at the fourth quarter waterfall as well as the full year waterfall, that's in the appendix and look at the ratio of the EBITDA generated that we isolate from SmartSide growth alone is about a 50% incremental margin on each additional dollar.

And again, that's just fundamentally operating leverage with price baked into it. And it's fundamentally that growth at that rate, producing that EBITDA that is in another way pushing the underlying long-term margin higher..

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

Maybe coming back to Siding.

Can you tell us if you've announced any price increase on siding for 2021? And if yes, how is that progressing?.

Yes. We announced a price increase, Ketan, that was effective January 1. And we do it by SKU, by geography, but just think about it in the 3% to 5% range. And we've been -- overall, we've been successful getting that pricing..

Got it. And was there any sort of pre-buy in the Q4 numbers? I know in the past, you'll have allowed something like 110% of Q4's allocation.

How was it this time?.

Well, Ketan, we were so tight. No, look, we had a great Q4 and a great December, but I wouldn't call that move up volume. I mean, obviously, they're going to -- distributors rightly sell, try to get orders in prior to the price increase.

But our -- we're so stretched right now from a order management standpoint that there was not significant volume moved out of January into December as a result of that.

We're just -- we're running so tightly right now that there's not a lot of opportunity for us to pre-ship or for a distributor to preorder ahead of anything, but that certainly didn't happen in December..

Got it.

And then obviously, with what you've announced today with Houlton and Sagola, I'm just curious kind of sort of any updated thoughts around Val-d'Or and the Cook projects that you had talked about in the past? And how are you thinking about those options that you all have?.

Well, Ketan, we plan to continue to grow Siding beyond the Sagola conversion, and we will continue to look at all available options for the next fill after all that. I mean, we do own a nice plant site in Cook as you know, we own a facility in Val-d'Or, Québec.

We also have -- I'll just remind, the that’s pretty new in Maniwaki, Québec that uses aspen and then we have Peace Valley. And we also have expansion opportunities within our current mill network. And finally, there are other people that own OSB mills in aspen wood baskets that we have periodic conversations with.

So all of those will be on the table as we think about beyond the Sagola conversion and which we are doing. I mean it's got to a point now with our growth, where every couple of years now, we're going to be needing to do one of these.

And so it’s a very active conversation and all options will remain available to us as we look beyond the Sagola conversion..

Got it. That's helpful. And then just one last question.

Obviously, we've seen a big rally in a lot of sort of wood product commodities, whether it's lumber, it's OSB, it’s plywood, are you seeing any signs that this big rally is starting to have any negative impact on demand?.

Ketan, I hear from listening to housing experts and listening in or reiterating the transcripts from the builders that obviously product inflation is an issue -- can become an issue around affordability, especially for the first time homebuyer.

That makes sense to me when I hear people talk about that risk, but we're not seeing that from a demand standpoint being in any way impacting the business right now. And look, the inventories are as lean as they can be and it's the middle of February.

So when we get to the spring building season, which is tomorrow, basically, as soon as we get this thought out here in the South, it's on -- it might be one of the constraints that is out there for the industry, but I think there's just so much momentum right now that we're going to -- we're -- the kind of growth that people are forecasting, I see an avenue to that kind of growth over the next couple of years.

So I hear it and I believe it. I believe it can be an issue, but we're certainly not seeing evidence of that in our order file..

Thank you, everyone. There appear to be no more questions in the queue. And so we will conclude the fourth quarter and year-end earnings call for LP Building Solutions there. Stay safe, everyone, and we look forward to speaking with you again soon. Thank you, operator..

Ladies and gentlemen, this concludes today's conference call. Thanks for participating. You may now disconnect..