Earnings Call Transcript - LPX Q2 2025

Operator, Operator

Thank you for joining us. My name is Jordan, and I will be your conference operator today. I would like to welcome everyone to the Louisiana Pacific Corporation Second Quarter 2025 Earnings Conference Call. I will now turn the call over to Aaron Howald, VP of Investor Relations. Please proceed.

Aaron Howald, VP of Investor Relations

Thank you, operator, and good morning, everyone. Thank you for joining us to discuss LP's results for the second quarter of 2025 as well as our updated outlook for the full year. On the call with me this morning are Brad Southern, LP's Chief Executive Officer; and Alan Haughie, LP's Chief Financial Officer. As always, after prepared remarks, we will take a round of questions. During this morning's call, we will refer to a presentation that has been posted to LP's IR web page, which is investor.lpcorp.com. Our 8-K filing, earnings press release, sustainability report, and other materials are also available there. Finally, I will caution you that today's discussion will contain forward-looking statements and non-GAAP financial metrics as described on Slides 2 and 3 of LP's earnings presentation. The appendix of that presentation also contains reconciliations that are further supplemented by this morning's 8-K filing. All of those materials are incorporated herein by reference. And with that, over to Brad.

William Bradley Southern, CEO

Thanks, Aaron, and thank you all for joining us today for LP's Second Quarter Earnings Call. I will describe some highlights from the quarter before turning the call over to Alan for segment details and our updated outlook for the second half of the year. The Siding segment once again delivered growth in the second quarter despite an increasingly challenging market backdrop. U.S. housing starts remain below long-term average demand levels and the single-family mix has softened, which has contributed to steadily falling commodity OSB prices. The general sentiment among repair and remodeling contractors is also more cautious than expected earlier in the year. However, once again, LP's Siding segment executed our strategy and achieved a record quarter for volume, revenue and EBITDA. We did this by delivering value for our customers across new construction, repair and remodel, and off-site construction with durable, beautiful, sustainable, and labor-saving SmartSide and ExpertFinish Trim & Siding. Page 5 of the presentation shows a summary of highlights for the second quarter. Siding revenue grew by 11% compared to last year, partially offsetting a negative $102 million impact from lower OSB prices. The result was $755 million in sales, $142 million in EBITDA and $0.99 of adjusted earnings per share for LP in the quarter. Both segments continue to improve operating efficiency, which we measure as overall equipment effectiveness or OEE. Siding OEE in the second quarter reached 78% and OSB hit 79%. OEE drives value by unlocking incremental capacity in Siding and increasing operational flexibility in OSB. I want to thank our operations teams for their dedication to running our mills safely and efficiently, maintaining our assets and delivering OSB and Siding with industry-leading quality. Current market conditions are difficult for our OSB segment, but LP has been here before, and we have demonstrated that our teams can execute our strategy, come what may. Siding is obviously not immune to the softening market, but the unique value proposition of SmartSide, the diverse market exposure in homebuilding, repair and remodel, sheds, and manufactured housing and our ongoing customer-focused new product development leave us confident that we have a long runway of growth ahead of us. I believe that in the long run, in good markets and bad, SmartSide will continue to capture share from other siding substrates and grow above the underlying markets we serve. I believe this because of the culture we have built. So before I turn to Alan, let me close by mentioning some examples of how LP's culture is driving results and being recognized. LP learned in June, which happens to be National Safety Month that we once again were named the safest company in 2024 by APA, the Engineered Wood Association. This is the third year in a row and the 13th time in the award's 17-year history that LP has earned this honor. LP's New Waverly Transportation team received the Platinum Award for Highway Safety from the Great-West Casualty Company. This was New Waverly's fourth consecutive year to win that award. In 2024, our team logged 10 million miles without a single preventable DOT reportable accident. 2024 was also the fourth consecutive year for LP to be named a top workplace in Middle Tennessee by The Tennessean newspaper. All of these facets of our strong culture as well as other aspects of our sustainable business model are detailed in LP's 2025 sustainability report, which we recently published. And with that, I will ask Alan to share more details on segment results, cash flow and our updated outlook for the year.

Alan J. M. Haughie, CFO

Thanks, Brad. I'd also like to add my congratulations to everyone who contributes to LP's strong safety culture. Safety is, of course, a reward, but a full trophy case is a nice bonus. Okay. On Page 7 of the presentation, you'll see that the second quarter for Siding was one of continued growth. But beyond that, there aren't that many other moving pieces. Revenue increased year-over-year by 11%, with 2% from price and 8% from volume. The volume increase added $35 million of revenue at nearly a 50% incremental EBITDA margin. Both the housing and repair and remodel markets were softer than off-site construction, which includes sheds and manufactured housing. And this mix shift slightly dampened the price benefit of another record quarter for ExpertFinish. But the pure price bar on the waterfall is really the only place where this adverse mix shows up because it was actually margin accretive in the quarter. We invested $2 million more in sales and marketing and saw another $2 million in minor inflationary costs with freight and labor inflation offsetting improved raw material costs. And of course, the tariff situation remains unchanged from the first quarter, and it is tariffs that comprise the bulk of the $4 million in the other bar. Looking through the fairly straightforward waterfall, it was a record quarter for SmartSide volume, revenue and EBITDA, with growth and leverage generating margin expansion. The EBITDA margin of 27% was not a record because LP's Siding mills are still not fully utilized. Continued growth in share gains with the corresponding leverage from higher utilization rates should, all else equal, drive margin increases. That is until they are temporarily dampened again by the cost and lower utilization associated with the starting of the next mill. In the grand scheme, this is, of course, a good thing, but it's a phenomenon we like to describe as the rising sine wave of siding margins. The OSB waterfall on Page 8 is once again dominated by commodity OSB prices, which, as I'm sure you're all aware, have fallen to multi-year lows. Even the $7 million of other in the far right bar on the waterfall is mostly the impact of price on inventory valuation, so price by another name. However, EBITDA of $19 million in the quarter meaningfully outperformed LP's algorithmic guidance, mostly due to exceptional cost control measures at the mills and the lag effect in price realization induced by our order file dynamics. In other words, when prices fall steadily as they did in the second and third months of the quarter, this lag provides a small but temporary silver lining. The current demand and pricing environment for OSB is unusually difficult, likely exacerbated by tariff uncertainty and elevated interest rates. We obviously have no control over commodity OSB prices. But as Brad said, we've consistently demonstrated that LP has the strategic clarity and operational efficiency to manage our capacity with discipline and agility, and we'll do our best to navigate the soft OSB market as we have done in many previous down cycles. So the cash flow slide on Page 9 is also pretty clean with seasonal reductions in working capital, net of tax payments, adding $20 million to the $142 million of EBITDA for operating cash flow of $162 million. This cash flow juxtaposed against current commodity OSB prices is a remarkable testament to LP's transformation and highlights the value of Siding's consistent growth, pricing power, and margin expansion through operating leverage. And we use this cash for consistent execution of our capital allocation strategy. We invested $68 million in CapEx in the quarter and returned $19 million to shareholders through dividends. With $1.1 billion in liquidity, including $333 million of cash as of June 30, LP is comfortably positioned to invest as needed in new siding press capacity, increased pre-finishing capabilities or other options to support and accelerate growth in Siding and execution in OSB, which brings me to our updated guidance on Page 10. Based on the order file we see before us today, we are reaffirming our full year Siding guide of about $1.7 billion in revenue and about $430 million in EBITDA. We continue to anticipate a normal seasonal demand pattern with volume roughly flat to last year's third quarter, which you recall was the peak demand quarter in 2024, plus about 3% higher prices. This would produce about $430 million in third quarter sales revenue for 3% growth despite housing and repair and remodel outlooks that remain quite challenging. EBITDA of about $110 million would result in an EBITDA margin of roughly 26%. As for OSB, well, commodity prices are exceptionally low, especially for this time of year, which would generally be the peak of the building season. In fact, adjusted for inflation using the CPI, today's OSB prices are the lowest in at least 20 years. Now while we cannot control prices, we are doing everything we can to control costs and manage our capacity with agility and discipline. Current prices are well below our EBITDA breakeven level. And while we certainly hope that the price assumption in our algorithmic OSB guidance does not play out, we also think there is value in maintaining a consistent approach to OSB guidance in order to provide as much clarity as we can. So in the event that random length prices remain flat at their current record low level through the year-end, the OSB segment would see negative EBITDA of around $45 million in the third quarter and a bit worse than that in the fourth quarter as the price benefit of the time lag dissipates, which would bring EBITDA for the full year for OSB to a negative $25 million. Now I'd like to stress that this is a model, not a prediction and certainly not a signal that we're anything but relentless in our efforts to reduce costs across our OSB network. In fact, part of the cost control efforts in OSB will show up in reduced capital expenditures in the second half of the year. This will lower our total CapEx to roughly $180 million for growth, which is still mostly in Siding, of course, and $170 million in sustaining maintenance for a full year total of $350 million, which is about $60 million lower than our prior CapEx guidance. Before taking questions, I would like to close with this. The demand environment is weakening somewhat, most acutely in OSB. But this only highlights the value of LP Siding segment, where growth driven by material conversion, product innovation and share gains lets SmartSide continue to outperform the market, rain or shine. And with that, I'll open the call for questions.

Operator, Operator

Your first question comes from the line of George Staphos from Bank of America Securities.

George Leon Staphos, Analyst

Congratulations on the progress year-to-date, gentlemen. First question, and you've been quite consistent in maintaining a conservative and balanced outlook for Siding and outperforming that over the course of the year. When we look at 3Q, it suggests a little bit of a decrement in margin and progress. Is there anything discrete that we should be mindful of there? Or is that, Alan, just trying to keep some cushion for the unknowables at this juncture in the quarter? And I had a couple of follow-ons.

Alan J. M. Haughie, CFO

Well, I'm not going to say there is a cushion exactly. However, I want to highlight that the third quarter of last year was our peak. Given the current climate, it's reasonable to think that Q2 might be our peak this year. If we look at Q2 and Q3 together, we are seeing about 7% revenue growth year-over-year, which is quite healthy. There are some other factors to consider, and our panel volumes were strong in Q2, but we don't expect that level of strength to continue. Thus, I would describe our approach to revenue as balanced and our approach to EBITDA as very cautious.

George Leon Staphos, Analyst

Okay. I appreciate that, Alan. And you gave us a fair amount of color for the third quarter. I don't know if it's worth it, but to the extent that you can comment about early trends in third quarter, what the exit rates are on volume for Siding, that would be helpful. And then my last question, I'll turn over and come back into queue. The CapEx numbers came down. It sounds like it's largely in OSB, but was there anything on the Siding side that we should be paying attention to relative to ultimately the growth outlook, the next conversion with Houlton, et cetera.

Alan J. M. Haughie, CFO

Right. I'll take the CapEx question and then Brad will take the sort of market-facing question. You're right that the majority of the CapEx reduction is in OSB. And arguably, if we weren't trimming OSB CapEx, I'd probably have left the whole CapEx guidance the same. It's hard to land such a thing on a dime. So the majority of the trimming is in OSB. There's a little bit in siding, but nothing significant.

William Bradley Southern, CEO

George, on the Q3 order file, we came into the Q2 order file really strong carryover from Q1 into Q2. We saw some weakening of that order file as we went through the quarter, and it's kind of stabilized where we were consistent with the guidance that Alan has given for the quarter. So it's good, but not as good as it was going into the beginnings of Q2.

Operator, Operator

Your next question comes from the line of Mike Roxland from Truist Securities.

Michael Andrew Roxland, Analyst

Congratulations on a strong quarter despite the challenging environment. I wanted to touch on the effective cost control measures you highlighted in OSB. You achieved $19 million in EBITDA, which is significantly higher than our forecast for the quarter. Can you provide some details on the actions taken, how the businesses operated, which costs were managed more efficiently, and what steps were taken to ensure effective operations during the quarter despite the unfavorable pricing conditions?

William Bradley Southern, CEO

Yes. So two key drivers to that. As I mentioned, the OEE really outstanding performance for the quarter. And kudos to our operations teams because it can be difficult at times to maintain efficiency when the kind of market is slowing down in front of you. But we ran just from an efficiency standpoint, the operations, particularly in OSB ran really, really well, which means high uptime, high grade yield and then good speeds when we were running the presses. And then second to that is we have been pretty aggressive on cost containment in that business as we saw the market fall away. And so those two combined really was a significant contributor to our ability to beat some of the algorithms around where margins should be in that business given where pricing is.

Michael Andrew Roxland, Analyst

Got it. And then just one quick follow-up. I would love to get your thoughts around shrinking home sizes and implications for Siding. I have to believe that even with home sizes shrinking that the currently low penetration rate of wood strand-based siding and the potential for an upcoming, let's say, residing cycle would more than offset shrinking home sizes. But any color you have on that would be great.

William Bradley Southern, CEO

I completely agree with your point. We prefer larger average home sizes for both of our businesses. However, considering the market share opportunities available in our various segments, we believe that acquiring new homes for our siding or expanding our market share in repair and remodel will more than compensate for any decrease in housing sizes as the industry addresses the affordability challenge. While it may pose a minor headwind, we have sufficient positive factors to ensure that it should not significantly affect our volume growth in Siding.

Operator, Operator

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

Ketan Mamtora, Analyst

I'd like to come back to the Siding guidance for the back half. Alan, if I heard you right, you said volumes in the third quarter would be flat year-over-year. But if I just think about sort of the implied fourth quarter, that would assume kind of revenues up kind of low double digits. Can you just help us understand kind of the nuances here in terms of what's going on in Q3, Q4 and if you are sort of baking in some recovery as we get into Q4?

Alan J. M. Haughie, CFO

We expect a fairly balanced year, with revenue around $400 million in both Q1 and Q4, and slightly higher in Q2 at $460 million and Q3 at $430 million. This reflects a seasonal pattern, primarily shifting between Q2 and Q3. We're projecting healthy volume growth for Q4 this year, although Q4 of last year had relatively low volumes compared to Q3. Therefore, I feel confident about our volume expectations.

Ketan Mamtora, Analyst

Understood. Okay. And then, Alan, can you just remind us in terms of your operating rates in the second quarter in both OSB and Siding and sort of what's your approach, especially in OSB, given where prices are? You talked about kind of doing everything you can on the cost side, but I'm just curious sort of your approach on the production side.

Aaron Howald, VP of Investor Relations

Yes. Okay. Thanks. So for OSB in the second quarter, we were sort of mid-80% range operating rates, a bit lower than that and maybe a hair lower than that in Siding as we ramp up new capacity. You can infer the operating rates from our volume guide in the third quarter for Siding. For OSB, we're always hesitant to specifically discuss volume for all the obvious reasons. But what I'll just say is that we are executing our strategy, which is to supply the amount of wood that the market demands. And current prices are telling us now that, that demand is not very high. When customers want more wood, we'll supply it.

William Bradley Southern, CEO

Yes. Let me just be repetitive to Aaron. We really have a finger on demand for our customers given who we are in the OSB business. And we're very cognizant of when our customers need wood, we want to supply it. But we certainly do not want to build any inventory in the channel or at our mill locations. And in order to avoid that, that leads to downtime to make sure we're matching capacity and production with demand, and we'll continue to do that indefinitely in our OSB business.

Operator, Operator

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

Susan Marie Maklari, Analyst

My first question is on the Siding. Can you talk a little bit about the sell-through that you saw into the second quarter and how channel inventories are positioned coming into the back half of this year? What gives you the confidence that you can see that level of growth that Alan mentioned in the fourth quarter?

William Bradley Southern, CEO

We believe that we had strong sell-through in Q2, and as we continue to ship what became record volumes, our customers are consistently placing orders. The inventories in the channel for Siding are in line with our expectations for this time of year. The positive pull-through was encouraging and somewhat unexpected given the economic and housing data we reviewed during the quarter. Overall, we are optimistic about the end-use demand in Q2 aligning with our order data and shipments. While demand has slightly decreased from where it was last quarter, we are confident that what we are selling is going directly to contractors for installation in homes rather than being added to inventory. The pull-through this year has been strong, and our channel inventories are reasonable for this time of year.

Susan Marie Maklari, Analyst

Okay. That's great to hear, Brad. And then following up on Siding, can you talk a bit about the mix that you're seeing? And any thoughts on how that will move in the back half? What are you seeing in terms of sheds, BuilderSeries, ExpertFinish, and just the implications there?

William Bradley Southern, CEO

This year has shown some extremes, particularly in Q1 compared to Q2, but overall, the trends have been consistent. Our strongest product is our panel business, which has seen excellent demand in our shed segments during both quarters, as well as good performance in home centers. Additionally, our prefinish business has achieved record volumes with ExpertFinish, indicating that the repair and remodel sector has performed well for us this year. We have invested significantly in manufacturing and sales and marketing over the past couple of years to build momentum, so it is encouraging to see our products significantly driving our results in Q2. Furthermore, although the overall demand for new residential construction has moderated due to a plateau in housing starts, our ability to gain market share over the past year has made it a notable factor in our growth. Looking ahead to the second half of the year, I anticipate some moderation in shed demand, which we are already observing, given the strong performance in the earlier quarters. However, we expect continued strength in ExpertFinish, suggesting that repair and remodel could remain a key growth driver for us in Q3 and Q4. As we continue to work with BuilderSeries and our national partners in new construction, we see steady performance throughout the year. Any potential improvement in demand from large national builders could further enhance our growth in the second half.

Operator, Operator

Your next question comes from the line of Sean Steuart from TD Cowen.

Sean Steuart, Analyst

A couple of questions. I want to follow up on OSB dynamics. And I guess we typically think of the industry cost curve as flat. Can you reference cost or margin variance across LP's portfolio and how that could inform downtime closure decisions? Just trying to get a sense of the margin differential from your best to worst mills.

William Bradley Southern, CEO

Yes. Sean, the cost curve is flat, especially at the mill level. So most times, our downtime decisions are driven by geographic location, transportation cost and then the local demand that is the outlet for most of that production. So it's really not necessarily that we line up variable costs, stack that and decide where to take downtime. It's more dependent on delivered margin based on where the mill is located and based on the customer base it's serving and somewhat based on contracted volume that is kind of in that mill's basket, which could keep the mill operating. So obviously, we do that trying to maintain as high a margin as we can, but it's not necessarily correlated strongly to cost out of the press, although that is a factor.

Sean Steuart, Analyst

Okay. Understood. And then revisiting the CapEx guidance, it sounds like this is mostly OSB related to the reduction to the 2025 spend guidance. Any updated perspective on the Houlton expansion? I assume a chunk of what you're delegating to discretionary CapEx this year is getting started on that. Broader perspective on when we can get more context on what the economics of that project might look like?

William Bradley Southern, CEO

So we are continuing to do the detailed engineering for that project and trying to absorb all the inflationary impact that it has had on some of the cost estimates that we had done earlier. So the work continues there. I would say, Sean, in the next quarter or 2, we'll be able to get more specific on tying down the cost and the returns. I will say, despite the inflationary impact on steel and construction, if you factor in the price increases that we've gotten over the last couple of years, the returns are still really healthy for a project like that. And we continue to work on it diligently, but just not ready to provide any detailed information yet because we don't have it.

Operator, Operator

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

Mark Adam Weintraub, Analyst

The performance in Siding remains strong, and your volumes are good. There have been some shifts, with sheds and pre-finish showing solid strength. One thing that caught my attention is that your estimated prices and accrued revenue per shipment are still up, but perhaps not as robust as I expected. How much of this is related to the mix? How is that influencing pricing? Or is it more a reflection of the current environment we are facing?

Alan J. M. Haughie, CFO

It's more about the mix than any headwinds. As we mentioned, panels are among our lowest-priced products, but they have high margins. I realize I may not have explained that well in my prepared remarks. ExpertFinish, on the other hand, is one of our highest-priced items but is currently experiencing some of the lowest margins. I remember when we initially provided guidance for the year, this question came up, and at that time, we were expecting relatively strong growth in sheds and panels, which indicated a dampening of the net price you'd see. However, we still have strong fundamental price increases across our portfolio. This really boils down to a significant mix factor. At times, we've experienced 9% pricing, which breaks down to 3 points from price and 6 points from mix, and we’re seeing somewhat of the opposite trend for 2025. It’s really about the mix.

Mark Adam Weintraub, Analyst

Right. So shed is outweighing ExpertFinish at the end of the day in terms of the impact on mix. Okay. Are you making other adjustments? You've pulled CapEx, primarily in OSB. I don't want to split hairs, but the marketing expense may not have gone up as much; it actually decreased a bit this quarter. What other adjustments are you making? Can you provide some insight into your broader thought process? It's a very challenging environment, so what is the current strategy?

William Bradley Southern, CEO

Yes. We are highly focused on managing costs in our OSB business, carefully examining every expense and how it is allocated. In the Siding segment, our growth over the past six quarters has largely resulted from increased sales and marketing investments we've made in recent years. We mentioned adding incremental capacity in Houlton and converting Sagola. We will continue to invest in sales and marketing, though this investment may not be consistent from quarter to quarter due to seasonal factors or the timing of marketing campaigns and new sales team onboarding, which can lead to fluctuations. However, the overall trend in Siding is to keep investing to foster growth, as we see significant market share potential. It's worth noting that despite my familiarity with the business over the years, we still struggle with brand recognition among builders and contractors nationwide. There's plenty of opportunity in the market, and we aim to seize it by enhancing our capacity and introducing new products while maintaining an aggressive approach to sales and marketing where opportunities exist. As Alan highlighted in his remarks, we see a lot of growth potential ahead, and we are committed to investing to achieve it.

Mark Adam Weintraub, Analyst

Much appreciated. Maybe just to follow up real quickly on that. Are there any additional kind of markers on the growth that you can highlight that's going to sort of help feed the machine in the quarters to come?

William Bradley Southern, CEO

Yes, there's significant opportunity in our ExpertFinish line. We recently launched the brush smooth product, which is now hitting the market and should help us tap into a previously unavailable sector where a smooth texture is preferred. Additionally, our natural series offers a two-tone option in markets that favor that look, providing further opportunities. On the contractor side, we've introduced three-dimensional corners that save labor and simplify installation, which has been well-received. For those who have visited our booth at the IBS, you would see that we consistently showcase new products each year. While we may not hit every target, we have a solid success rate, and these innovations open up markets where we were previously underrepresented. Our post-COVID innovations have been pivotal in driving demand growth by expanding the market possibilities. We will keep investing in this area, including in our innovation teams as part of our SG&A and marketing expenses.

Operator, Operator

Your next question comes from the line of Matthew McKellar from RBC.

Matthew McKellar, Analyst

A couple of related questions on how you're competing with other substrates. First, in the new residential market, in particular, is it your sense that vinyl is still donating the most share or materials like brick now under more pressure with more focus on affordability? And second, would you expect higher lumber prices on the back of increased duties and potential tariffs on non-U.S. supply to be meaningful for how you compete with sawn wood siding in the U.S. market?

William Bradley Southern, CEO

On the brick front, there is indeed an opportunity with the cost of brick, the push for affordability, and the availability of labor for bricklaying. While some small builders might be starting to explore this, it's not a significant contributor at this time but could present future possibilities. The main opportunity we see continues to be in vinyl conversion, both in new construction and manufactured housing as well as in repair and remodel. Affordability tends to drive people towards vinyl siding, presenting some constraints for conversion. However, looking at long-term value, we believe this is a promising area for us. Regarding trim, we do compete with solid sawn trim products. Our prices typically exceed those of solid sawn wood because of the associated value. If we were to see a price increase on solid sawn products, it would benefit our trim business. However, once we've converted a contractor to our engineered wood trim, there usually isn't much backtracking to solid sawn, unless prices drop significantly.

Operator, Operator

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

Steven Ramsey, Analyst

I wanted to think about manufactured housing and sheds from a couple of angles. First, can you share high level where manufactured housing can be for the Siding business, thinking about how the affordability challenges may be pushing some buyers towards that product and basically, if that can be an expanded total addressable market for your Siding products? And then secondly, on sheds, where demand is this year, how far it is off the prior peaks or where it compares to past levels and if we're at highs on that side of things or if there's more gains to be had in the next couple of years?

William Bradley Southern, CEO

Shed demand was outstanding during COVID. I can't say for sure if we're back to that peak right now, but we've experienced a rise, a dip, and now we're seeing more normal and strong volumes, especially compared to previous periods. Overall, it's been a strong year for us, and I don't believe there has been any overbuilding or pulled forward demand like during COVID. This sector is performing well for us, with consistent panel volume that we manage efficiently and which carries good margins. On the topic of manufactured housing, I see it as a significant opportunity for us. The industry is likely to address affordability challenges through manufactured housing. Our siding is an excellent option for modular buildings since it offers a higher aesthetic compared to the main product currently used, which is vinyl. We provide warranties, and our siding can be pre-finished, improving efficiency for manufacturers while adding structural stability to homes. We see this as an opportunity, and while we've held some market share over the years, I believe this industry will grow as affordability remains an issue, and we're well-prepared to benefit from our long history in that market.

Operator, Operator

Okay. That's great color. And then shifting to Structural Solutions and OSB still half of volume and volume held flat, albeit at low levels. Can you talk about where you're seeing demand within that portfolio and if there's anything to dissect between new product adoption or discretionary purchasing?

William Bradley Southern, CEO

Yes, the demand is broad across our product offerings. Our primary volume strength comes from our flooring product and TechShield Radiant Barrier products, both associated with new construction. Particularly in flooring, when affordability is a concern, consumers often opt for less expensive options. These two products remain our volume drivers, and we are satisfied with their performance percentage, even though it has declined from previous peaks in Structural Solutions. This decline is largely due to affordability issues, prompting customers to seek the lowest cost available. We will continue to promote our value proposition, which remains a significant aspect of our business. Aside from emphasizing the strength of our flooring and Radiant Barrier products, the rest of our offerings have experienced steady to moderate growth over the past couple of years.

Operator, Operator

Your final question comes from the line of Kurt Yinger from D.A. Davidson.

Kurt Willem Yinger, Analyst

Just one question on the new residential opportunity set for Siding. Your largest peer has kind of announced a number of these multiyear kind of exclusivity agreements. I was just hoping if you could help us understand whether with that, the opportunity for share gains is kind of relegated to the smaller and medium-sized builders until those were sort of to expire or whether there's more nuance or kind of intricacy in terms of trying to drive penetration among those production guys given that?

William Bradley Southern, CEO

We approach opportunities in a nuanced manner. These can arise, for instance, from the multi-family segment of a builder with whom we don't have a single-family relationship. There are numerous ways we engage with large builders regarding their siding and OSB requirements. We continue to achieve successes and recognize ongoing potential in this area. As mentioned earlier, we don't win every opportunity, but we have secured several victories. Our BuilderSeries volume is increasing significantly, demonstrating our competitiveness. For many years, we lacked a solid value proposition for major national and regional builders, but we have developed that now, and it resonates particularly well alongside our OSB products. We are focused on expanding in this segment and foresee further growth opportunities ahead.

Aaron Howald, VP of Investor Relations

Okay. Thank you, Jordan. With no further questions, we'll end the call there. Thank you all for joining us to discuss LP's results for the second quarter of 2025. And as always, we'll be available for follow-ups throughout the day and the rest of the week. Thanks, everyone.

Operator, Operator

This concludes the meeting. You may now disconnect.