difference between them has compressed a little bit since the structural solutions products tend to be more raw material intensive, and so when we see inflation in those inputs, that compresses that a bit. But Jason's absolutely right. There are very few structural solutions products that we only manufacture at one mil, so we've got plenty of redundancy and flexibility in there, and our strategy with those products is the same with all the others. We'll respond to customer demand and supply the market with the products that they need.

Okay. Thank you both for the color. Good luck with the quarter.

Thanks, Sue.

Our next question comes from George Staffos at Bank of America Securities. George, your line is open.

George, if you're speaking, we can't hear you. Operator, maybe we go to the next one and give George a chance to circle back in.

Okay. Our next question comes from Matthew Bully at Barclays.

Good morning, everyone. Thank you for taking the questions, and my congratulations as well to Alan and to Aaron. Best of luck to you both. So just the CapEx guide reduced by $70 million, you mentioned you've got flexibility to scale back or postpone. Basically, just if you could unpack that a little bit, what would you be pulling back on? And is there sort of any changes to your medium-term market views that would be influencing your CapEx outlook?

Thank you. mostly what we would be pulling back on would be the maintenance projects that are lower risk both from a obviously most importantly from a safety standpoint but also from compliance with regard to environmental emissions things like that you know when when those projects are delayed they are only delayed they can't be eliminated so eventually we're going to have to do that work so we do that sort of you know risk balancing relative to what customer demand looks like to know where we have mills and where we have projects that can be delayed a bit. In terms of investing in growth, we didn't slow that down much at all. I mean, we broke ground on the North Branch facility. That'll be our largest and most efficient expert finish facility earlier this summer. In fact, Jason operated the backhoe. And so the postponement is on the more longer-term sustaining maintenance type projects. And obviously, predominantly in OSB, where we push those costs.

Okay. Got it. Got it. Thank you for that, Aaron. Second one, just back on the OSB structural solutions, the volume pressure there this quarter and last quarter.

Is there a theme there where, I don't know, if it's home builders, let's say, decontenting or shifting towards other lower value commodity product, et cetera, or just anything else going on there that you kind of unpack some of the pressure going on there? thank you yeah I think you're spot on there there's there's cost pressure that's playing into it you know for example builder might trade down from from one flooring option to another but there is a broader code evolution that's taking place that is impacting our radiant barrier which is the largest portion of that volume so between those two factors that's what's driving the the reduction in volume.

Okay, got it. Well, thanks, guys. Good luck.

Our next question comes from Stephen Ramsey at Thompson Research Group.

Hi, good morning, and like others said, congratulations to all of you there. Connecting the dots here a little bit, you maintained the full year sighting guide, yet the order patterns have been very strong. You noted Q2 and into Q3. Is there some conservatism built in here, or is this catch up from Q2?

There's a bit of conservatism built in, yes. We don't want to extrapolate forward just a couple of weeks of pretty robust order files, but yes, there is perhaps a bit of conservatism in that.

Okay, that's helpful. And then sticking to siting growth, there's the long-term opportunity in manufactured housing. Can you talk about the progress on that in 2026 and manufactured housing outlook within the guide?

Sure, I'll talk about the progress in a couple of ways. One, we are really encouraged by the traction we've seen for taking the same sort of enterprise approach to bundling, siding, and OSB with the home builders, we're encouraged that that is attractive to manufactured housing people as well. So there's an opportunity for growth there. In terms of the market itself, with the passage of the Housing Act recently, that should all else equal help manufactured housing be part of the affordability solution and compete against the lowest price point stick-built homes where LP would struggle to get traction just from an overall cost standpoint. So we think that the market has some potential to improve, and within that we're encouraged by the progress that we've made.

Yeah, the only thing I would add there is over the course of the last two to three years, we've allocated more resources to that segment than maybe in prior years. because we saw that as an opportunity for us to really gain more traction. And I'm pleased to see that even in a soft market, we've seen year-over-year growth. And as Aaron mentioned, the enterprise bundling approach seems to have some stickiness in that segment. We're looking forward to future updates there.

Excellent. Thank you.

Thank you.

Our next question comes from Sean Stewart at TD Cowan. thanks good morning everyone uh congrats to both alan and aaron um a couple questions wondering given you know the ongoing positive trajectory you're seeing for citing order files how you're thinking about the next capacity expansion option timing and and how that might inform your capex plans into 2027. yeah what i'd say right now is No specific updates relative to what we've shared on prior calls.

We're confident that we have plenty of capacity available right now. I think I mentioned on the prior call, four to 500 million feet of headroom and primed, and plenty more coming in expert finish with Green Bay, Bath, and North Branch expansions. What I would say is we're continuing to assess demand projections. Our Maniwaki facility is more than likely the lead dog in the hunt, but we're fortunate to have other options available to us. So I would say it's in flux right now, but we're keeping a close eye on it.

Thanks for that, Jason. The second question is on costs. you know appreciate resin is probably the most volatile piece of it right now we've heard from one of your peers that they've seen relief uh for for log costs in in north america given less competition for for pulp logs have you guys seen any of that in in your mix both osb and siding in recent weeks or months?

We saw some of that to begin the year, but with oil prices moving so dramatically the other direction, that has trended in the opposite direction. So that isn't going to carry through for us the back half of the year.

Those dynamics are very local, as you know. So it's not necessarily the case that those same dynamics to impact all the consumers of those pulp logs.

Understood. Thanks very much, guys. Thank you.

Our next question comes from Kurt Yinger at DA Davidson.

Great, thanks, and congrats, Alan and Erin. Just wanted to follow up on the question around capacity expansion. I mean, recognizing that, you know, it doesn't sound like Maniwaki is necessarily the 100% next project, I guess, is there any consideration being given at this time to to you know maybe pulling a project like that forward just given what we're seeing in osb and maybe more broadly you know what are kind of the puts and takes around that you know recognizing you don't necessarily need that siding capacity but it might help on on kind of the osb side given what where we're at right now yeah good question Kurt what I would say is you know we're not going to make long-term

siding capacity decisions based on kind of what we're dealing with in the short term for OSB we're going to broadly assess you know all the options available to us and look at what's the best return to LP and the siding business as well so can understand where you're coming from but you know that That's not the primary filter we're putting these options through.

Even if we did that, the cost of that magnitude of expenditure for a siding mill a couple or three years earlier than we needed it would more than offset the likely benefit that it could potentially create to price from a supply-demand pressure standpoint in OSB. So even if we were tempted to do that, it probably wouldn't be as effective as one Okay.

Yeah. Fair enough. And then there's been some noise, you know, around building codes kind of locally and wildfire prone areas and things like that. And I'm just curious, you know, big picture, what you're hearing or seeing across certain parts of the country, how you're, you know, positioning engineered wood as a siding material, given some of those conversations. and we'd love to hear any color on that.

Yeah, I'll touch on that. So I think you're referring to WUI codes, and I've mentioned on prior calls that this dynamic is nothing new. It's something we've dealt with for, again, as long as I've been with LP. There have been some changes in one state in particular and a couple local markets, and specifically, I guess, where code requires an ignition-resistant or non-combustible cladding and does not allow for a wall assembly, including smart side, to meet code, that is where we are challenged to meet the requirement. Fortunately, this is a small portion of the addressable market. One area in particular is Colorado you know this is there's there's been some changes there but fortunately for us you know our volumes down there but it's not down more than necessarily housing starts in general so we're monitoring that closely and have a number of different new product development initiatives in place coupled with a heavy push on educating local authorities on the value prop a smart side in relation to some of the code changes they're debating just to make sure we're positioned well for the future.

Got it. Okay, thank you for that. Appreciate the color. Thanks, Kurt.

Our next question comes from Mike Wontraub at Seaport Research Partners.

Thank you. First, Alan, congratulations. While Brad and Jason were busy transforming LP from OSP to siding. You certainly did your thing with the balance sheet with all that share we purchased.

And congrats again.

And Aaron, of course, congrats to you. So I wanted to just focus a little bit more on some of the questions on when you do build the next siding facility. It's gotten a lot more expensive in a number of industries to build. And we know what it used to cost you to build a new siding facility. And I know it could vary depending on what you do. But is there any kind of color that you can share with us to help us understand potential magnitude of project when you do decide to press the button to move forward?

Yeah, I'll take that, Mark. It is far too premature to share specifics on that cost, but rough order of magnitude, what I would say is that, yes, inflation is a factor. Steel is more expensive. Labor is more expensive. That project will be more expensive than the previous conversions at Segola and Holton for a couple reasons. One, because it's bigger. So assuming Maniwaki is where we build, it would be a larger project that would produce more siding. That alone would increase the cost, but inflation is another factor. Fortunately, the other thing that continues to increase is siding volume and siding price. So if you do the internal rate of return calculations, the inputs are bigger, the outputs are bigger. The return in percentage terms is pretty similar. But when we have more detail about first where the next mill will be and then as a function of that, what the project looks like, we'll be able to share those. It's just a little bit early for that now. But we're confident that it'll be an excellent investment in ongoing siding growth.

Super. Makes sense. And just since Matawaki says, I think, we're characterized as lead dog by Jason, is it fair to conclude that like these new Canadian tariffs that were announced, they don't have any impact on siding?

That is correct. But just like we wouldn't make a long-term siding decision based on short-term OSB volatility, we would be reluctant to make a long-term siding investment based on a tweet about tariff policy. Understood.

And then also just to – and how long is it from the time that you would decide, decision to move forward, and have a facility up and running, recognizing again it could differ depending on what you're doing where?

A lot of moving pieces in that as a function of where the location would be and what the project would look like, and to a lesser extent, what specific mix of siting products we would plan to make there. But if you think on the order of two and a half years from decision to first board, that's probably in the right ballpark. So given the capacity that we have in our existing footprint, we've got a fair amount of flexibility about making sure that we can time that so that we don't have too much excess capacity for too long before we're ready to bring that next mill up to speed.

Great. Thanks very much.

Thank you.

Our last question comes from Adam Baumgarten at Vertical Research Partners.

Hey, guys. Last quarter, you talked about expert finish volumes growing mid-single digits in 26. Is that still your assumption for the year?

Yeah, that's more or less what we expect. And expert finish has been the best-performing category of our siding business year to date. We saw volume growth in the second quarter, and that makes us even more confident in the capacity that we're adding to supply that future demand.

Okay, great. And then just a comment you made earlier on kind of your lack of incremental price actions in 26, maybe just some share gains. Is that a broad-based comment? Is it maybe more specific to the HomeBuilder channel or R&R or is it both? Just curious if you can get some more color there, kind of where you're seeing that progress.

I don't think that's knowable really. I suspect that to the extent that we are getting volume from it, it would be relative to the – if our lack of price action is driving volume, it's easy to assume that it's relative to the products that are taking price action. But we can't know exactly why we're gaining a particular amount of additional share in a particular market. But we know that we are incrementally more competitive when we're stable and dependable in terms of pricing. and we think that it is contributing to our performance in the back half positively. Can't be hurt. Can't be measured, but can't be hurting.

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

Okay, I guess George wasn't able to dial back in, so we'll connect with you later. Thanks, everybody, for joining us. With no more questions, we'll end the call there. Hope everyone is safe, and we'll look forward to connecting later on during the day and during the week. Thanks very much.

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