Good day, ladies and gentlemen, and welcome to the Louisiana-Pacific Corporation First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference Mr. Mike Kinney, Director of Investor Relations and Treasurer. Sir, you may begin.

Thank you, Ashley, and good morning everybody. Thank you for joining our conference call today to discuss LP's financial results for the first quarter of 2019. I'm Mike Kinney, Director of Investor Relations and Treasurer. And I am joined today by Brad Southern, LP's Chief Executive Officer; and Alan Haughie, LP's Chief Financial Officer. As we've done in the past, we've opened up this call to the public and are doing a webcast. The webcast can be accessed at www.lpcorp.com. Additionally, to help with the discussion, we've provided a presentation with supplemental information that should be reviewed in conjunction with the earnings release. We will be referencing these slides in our comments this morning. Also, we have filed our 10-K and 8-K this morning with some supplemental information. With that, I will turn the call over to Brad.

Thanks, Mike and thank you all for joining us this morning. I'll begin today's call with a few highlights on the first quarter and update on our growth and efficiency initiatives, provide our current view of the market environment and then turn the call over to Alan for a more detailed look at our results. But before I do any of that, it gives me a great pleasure to acknowledge in addition to our team here in Nashville. Robin Everhart joined us in mid-April, as our new Senior Vice President, Chief Human Resources and Transformation Officer. Robin is filling the vacancy created with, when Tim Harnett accepted the role as Senior Vice President of Operations at Entekra, our joint venture that provides fully integrated off-site framing solutions. Robert is now responsible for all HR functions and will play a key role in ensuring a strong linkage between our transformational goals and our HR programs. Throughout her career, she has bolstered strong business relationships, helped create significant economic value and build-high performance business cultures. I'm excited to have Robin on the team, and I'm confident she will help drive our strategic transformation into a leading building solutions provider. Speaking of transformation, let's turn to Slide 5, for a summary of our recent accomplishments. In the first quarter, we grew Smart Side Strand revenue by 13%, expanded Siding capacity, introduced a popular new Siding products and a new weather-resistant sheathing product, improve plant efficiencies and return cash to our investors. On the February call, we announced the imminent launch of our smooth SmartSide Strand products scheduled for the international builders show. This range of products, which combines a clean look with the rugged durability and long-lasting beauty of our LP SmartSide offering, fulfills a long-standing needs for a solution that offers a…

Thanks, Brad. In addition to reviewing the consolidated results for the quarter, I'll be providing high level revenue in EBITDA bridges between this year and last year for the Siding and OSB segments, and updating you on the progress of our capital allocation plan. Throughout my prepared remarks, I will be referencing specific pages of our earnings presentation which was posted on our Investor Relations website this morning. So moving to Slide 8 for a review of the first quarter, starting with the consolidated income statement. Net sales fell year-over-year by $109 million, $105 million of which was in the OSB segment, with realized prices for OSB, almost 30% lower than the first quarter of last year. This was partly offset by a 13% year-over-year increase in SmartSide Strand revenue comprising 8 points of volume growth and 5 points of pricing. And along the way generating $22 million of incremental revenue. This growth in SmartSide Strand was offset by softer EWP sales by much tighter overall market conditions and lower OSB revenue from our Dawson Creek mill. As a reminder, during the first quarter of 2018, Dawson which rolls up into our Siding segment was producing OSB, whereas for much of this year's first quarter, it was in the latter stages of being converted to produce Siding and was therefore out of commission. Gross profit fell by $96 million, the negative impacts from lower volumes in EWP and the Dawson conversion were offset by a combination of cost reduction actions and the improvement in product mix, inherent in replacing low margin EWP with higher margin SmartSide Strand plus neutralizing everything with the OSB price reduction. Selling and administrative costs increased by $6 million in the prior year, with the largest single driver being investments in sales and marketing, consistent with…

Thank you. [Operator Instructions] And our first question comes from the line of George Staphos with Bank of America. Your line is now open.

Good morning. This was actually John Babcock on the line for George. Just wanted to start out, it looks like on the Siding side of things, our average price realizations were up around 4% to 6% across different product lines. And wanted to get a sense for how you're thinking about that going forward? And then also just wanted to get an update from you on how the Siding market as always looking to you right now?

So first on the pricing, you're right about the number, frankly 4% to 6%. George, we went out this year with a similar pricing, price increase strategy as we implemented last year, same timing March 1, and we are looking into this year as having similar results around the price improvement that we saw last year. So I would just kind of guide to last year's improvement carrying over into this year, as well as far as percentages go. And then the second part of your question was about the market outlook for Siding. So as you know, we mentioned on the last call, we did allow customers to pre-buy before the March 1 price increase that was very successful. We'll allow them to buy 110% of last year's volume, they pretty much did that across the board. We also had some early or being around the smooth product launch, that would build a bit of inventory. But like we carried some inventory into Q2, a little higher than normal and Siding, as we, because the price increasing, price increase we implemented in Q1. And so, but with any kind of good pull-through to the second half of the quarter, we should be back to a reasonable inventory levels or normal inventory levels by the end of the quarter in the channel and certainly at our mills.

Okay, thanks for that. And then just one quick follow-up, just on OSB, you talked about the downtime, I just want to clarify, I guess, so that 35 days was included in that 70 downtime, total downtime days, and then I was also wondering if you could talk about the cost of that downtime, I think you might provided some color, but just wanted some clarification there.

Yes, you're right. The 35 days of Carthage downtime was included in the 70. And in essence, the cost of that downtime, if you look at the OSB waterfall, it's largely embedded in the volume, volume base, you see there $14 million of revenue down and $9 million of EBITDA impact essentially includes the impact of that downtime.

Okay. Thank you.

Thank you. And our next question comes from the line of Mark Connelly with Stephens. Your line is now open.

Thank you. When I look at products like WeatherLogic and think about the success you've had with our Radiant Barriers, that looks like a good market for you, and I'm just curious how you think about what percent of your U.S. panel business might be receptive to that kind of value added product versus the overall market?

So, Mark, I would talk about it this way. First of all, it's a sheathing product, so it's used vertically on the home and we see a very, very good possibility over time for the industry convert, almost 100% to that, that value added product, because of the cleanliness on the job site and the characteristics of the overlay. So that will be a long pull, that's not going to happen immediately, and a lot of that has to do with this product availability right now, but we are very excited about a deep penetration and significant market share being gained against commodity products to go on to the side of a home. We're just getting started in it, but we have great distribution in place. We have distribution obviously that knows how to sell into that market though. We could see that being as successful as our Radiant Barrier product is today and as we move into the future.

So there is no geographic placing, the Radiant Barrier, obviously was a lot more geographically limited. So that's why I was asking the question why it did. So you think this product can work nationally as configured?

Yeah, sorry, Mark, I didn't understand. Absolutely there is no climate restrictions on selling the product for the sheathing.

Fantastic. And just one more question, we're starting to see builders make changes to the size of the homes, something they really didn't do that much in the 2009 to 2011 area. Are those changes big enough or do you think they're going to be big enough that they would actually start to change the assumptions you make when you're doing your own forecasting?

Great question, Mark, we have been hearing that as a trend and there are some data out there, currently they're showing that is maybe beginning to happen. And that's all in the context of affordability in making a home or constructing a home that millennials can afford to occupy as their first or second home. But I do think smaller homes and more cost-efficient homes are on the horizon for the industry, but we really have not seen that playing out in the ratio of housing starts to OSB demand. So we are not baking any of that into our long-term demand projections for OSB, so I think it's something we need, we need to keep an eye on it.

That's super helpful. Thank you.

Thank you. And our next question comes from the line of Ketan Mamtora with BMO Capital Markets. Your line is now open.

Good morning, Brad, Alan and Mike.

Good morning, Ketan.

First question, can you talk a little more about competitive dynamics in the Siding business? I mean from a demand standpoint, housing starts are kind of pretty much flat. There is also supply that's getting added in the industry. So kind of what are you seeing in the market? And your volumes kind of grew pretty nicely in Q1. So just talk about kind of where you are seeing growth as well whether it's in, in particular geographies or in end markets if you can comment on that?

So Ketan from a percentage standpoint, the growth that we're seeing is national. Now we work off a larger or smaller basis, depending on our current market penetration by geography, but we're seeing growth really across all geographic areas that we're national. So it's everywhere, but so we're seeing good percentage growth across nationally and into Canada. We do benefit from the breadth of product that we offer, so our growth is not just coming from our lap portfolio, which we compete against, can be one-on-one against fiber cement. We're seeing good growth in our panel offering that goes to the retail. And then our trim product is really grown well for us. So it's, the percentage growth is across the board geographically and really across all product categories. Now with that said, our opportunity and our focus area right now is around the opportunity in repair and remodel. We are not as penetrated nationally as we would like to be in that segment, we have good market share in the North Central region and not as good market share the rest of the country. So our focus and the reason we talked about in incremental marketing spend, in our Siding business is really the opportunity, we'd say to accelerate our growth in repair and remodel, across all regions other than the North Central and that's only because we're already pretty well penetrated in the North Central region.

Got it. That's helpful. So just on that R&R, how big is your penetration right now in that end market?

Yeah, we're in middle single digit percentages on market share penetration of R&R. So a lot of room, Ketan, for growth there.

Got it. That's very helpful. And then just turning to kind of Dawson Creek for a minute. So there was about $9 million of expenses, Alan. So as we think about going from Q1 to Q2 and then the back half of the year, sort of any rough estimate on how those costs kind of wind down? Any ramp-up production there?

A little. We will see, as Dawson ramps up, we will see a, let's say a headwind on this at least through Q2 and Q3, simply because, as it ramps up. It will be smaller with each progressive quarter and all things considered. But we will see this impact for a couple of quarters as it ramps up.

Got it. And then can you also touch on kind of any debottlenecking that you maybe doing either at your OSB mills or Siding mills?

Yeah. So Ketan, when we talk about our improvements in OEE, that is our focus on, we can call it debottlenecking, we can call it speeding up, we can call it getting improved a great yield, but it's a combination of all the parameters that go into proof of production at our mills on a per unit of time. And so we are, and that is, that usually has a unique issue in each mill and what were the current constraint or the current opportunity lies for productivity improvement can be unique to each mill. So we have teams that are focused on mill-specific opportunities to improve throughput in both the Siding and the OSP business. We do tend to have a little bit further ahead on that project in our OSB, business that's been a key focus area of our own Siding, we've been more focused on growth. But we have, we did start our OEE initiative in Siding last year and are also seeing really good improvement there. So debottlenecking and speeding up our equipment, improving our A grade yield are focus areas across the entire business. And I'm really proud of the improvement that we've seen in OEEs. As Alan talked about in his remarks, that single-digit EBIT improvements can be overshadowed by the huge movements in OSB pricing, but one of the reasons we were able to be EBITDA positive in that segment in the quarter is because of what we did around the productivity improvements while we were running.

Okay. Got it. And then is there any way to quantify even if it's on a percentage basis what kind of the impact be, maybe on capacity at the mills from those initiatives?

Well, Ketan, I said, we certainly, we have that, because as I mentioned last quarter, we are targeting 90% across our system, as our first key benchmark we work toward. I don't have exactly the volume in front of me, but I said I think two calls ago, that would quite, that would equate to a mills worth of production in our system. So when we, when we kicked off this initiative really aggressively at the beginning of last year, what we told our operations group is, let's go find that hidden mill, that we have in our system that will require very little capital in order to unleash. And so, it's significant, the volume that we could pick up there, and that's really efficient capacity to go and harvest since it's basically only your variable cost associated with producing that extra volume. So as we've converted mills like Swan and Dawson over to Siding, the way that we get productivity improvement in or I should say production improvement in our OSB businesses through our OEE initiative, and then some modest capital projects that we implement, that can also give us incremental capacity. And I know you probably, maybe wanted a more specific answer to that, but I'll just say we've got a lot of headroom and as we look at it across our whole system compared to where we started the year, last year, we're talking about our mills worth of production.

Got it. That's very helpful color. I'll turn it over. Good luck for the rest of 2019.

Thank you, Ketan.

Thanks, Ketan.

Thank you. And our next question comes from the line of John Tumazos, with John Tumazos Independent Research. Your line is now open.

Good morning, John.

Hello?

Hello. Hey, John.

Hi, John.

This is John. I am sorry. Hello.

Hello.

So in terms of the OSB industry, other companies have not been quick to cut production. In the container board industry, for example, the operating rate fell to 86.4% in the March month where they had lots of reasons to be optimistic hearing that volume growth for containerboard or peak June and September seasonal quarters. Why do OSB companies, do you think not cut production as much as, say the containerboard sector. Is there structural reasons why the plants are harder to phase down or take or pay contracts for chips or other factors that might cause companies to produce too much?

So John, let me, I'll just speak to how we approach by taking market-related downtime. And because, so I can only speak to our experience. We run to meet our customer demand, so we want to sell volume into active orders versus pushing volume into the market where our customers are really looking for the volume. So we're very focused on gauging the underlying demand in our customer base and supplying that demand. But we would not put any incremental volume beyond and what's needed in the marketplace. As far as the cost part of it, is I would say going into the big downturn in 2007, 2008, we did have a view that it was extremely inefficient to run OSB mills anything other than 24x7. We learned how to do that pretty effectively during the downturn and we've carried that learning into our system today. So, while it's not optimal we feel confident that we can run mills other than on 24/7 operations and that's what the market need is. So our personal experience is, we can't be relatively efficient, we did see some cost escalation associated with the downtime. As Alan pointed out, and that's going to happen when you can't cover all your cost with volume. But we want to do it pretty efficiently and we want to remain disciplined around making sure our customers have adequate supply, but not overreaching as far as building a lot of inventory at our mills or in the channel.

In your OSB segment, thank you. What fraction of the volume are flooring, furniture, other specialized uses, where the products don't fluctuate with Random Lengths through to the degree, the Random Lengths prices fluctuate?

John, we, as I mentioned, or Alan and I both mentioned, 40% of our volume is in our Structural Solutions, but only a small subset of that is not tied to Random. So we do have some products like LP FlameBlock that is, that is not tied to Random really at all. And then we have products like our legacy flooring that is tied to Random kind of remotely. So it's less than 10% of our portfolio is, is not in some way tied Random over quarter-over-quarter period.

Thank you.

Thank you. And our next question comes from the line of Chip Dillon with Vertical Research. Your line is now open.

Yes and good morning, Brad, Alan and Mike. So great, you know with details. First question I had is just to make sure I understand the share count. You mentioned the ending count was, I think 125 million diluted. But again, you've already paid for about and we don't know the exact numbers, 3 million more shares. You just don't reflect that until you settle up with Goldman, is that right? So it really is somewhere around $122 million. And I guess just as you clarify that. I think you said you'd be out of the market until that is settled, which will be sometime between now and September 30. If that's true, would you expect to be back in the market before year-end?

Yeah, I think the answer to all of that is, yes. You're correct, that the remainder, the remaining let's say 20% of the number of shares of $400 million in theory, has bought us, will be part of the true-up that occurs when the arrangement, the ASR arrangement ends. It could end before the end of the third quarter, but it has to end by the end of the third quarter. Subsequent to which and all the other things being equal, we'll back in the market, in some way, shape or form. We haven't decided yet whether we do another ASR or whether we, as it was just buy on the upper market ourselves.

Okay. And then I think Brad was talking about WeatherLogic before, and you drive around and you see houses built or being repaired and you see that, the tie back in these other branded wrappings. If you could just tell us why, I believe you said WeatherLogic would replace that. Although, I think it will would replace that, and what advantages does it have, is it a price issue or are there other properties that make WeatherLogic? And I'm not asking you to compare with the brand I mentioned, but just with other brands in general that are more established.

Yeah. So you're right, it replaces the need for secondary weather wrap. The wrap is integrated into the overlay, that's on our products. And then, Chip, you know, I'm sure you've seen the green product installed in places. It brings a really clean look to the site, a lot less waste, a lot more resiliency as between the application of the warp in the Siding that goes on the house. So there is a minimal chance of any kind of wind damage blow when the house wrap off. Those also because of the tape seams, it provides for a much more integrated and closed system, that's how we talk about the energy efficiency aspects of it. So the advantages are clean, very clean work site, much more confidence that the builder can have about the installation in the sale that goes into the home and then, the cost, well then it's a one-step operation. So typically, when you're doing a house wrap, you sheath the home with your OSB first, then come back and do the house wrap and with WeatherLogic, we're installing it all at one time. So there is a labor efficiency and a timing, the time efficiency that comes along with that. The cost can be, it's really geographically dependent so it's, the cost advantage is based on the labor rate in the marketplace, along with the cost of the secondary house wrap. So it's not, not necessarily providing a huge cost advantage that the value prop is more on the aesthetics, the quality of the job on the home and the confidence that the builder can have, that they got a nice pipe seal on the sheathing part of their home.

Thank you. And our next question comes from the line of Mark Weintraub with Seaport Global. Your line is now open.

Thank you. Can you give us an update on or have you received an update from Goldman in terms of how much of the accelerated share repurchase program has been completed by a certain date?

Great question, Mark. But I'm am not in a position to answer that.

Okay. And then second on the Siding business, obviously look to me like a very good start to the year, what I guess I wasn't quite sure about is, given that we had the price increase and that we had buying in front. Are you able to get good visibility on what the actual consumption of the product is? As opposed to just any inventory build given that the price increase was in place, and basically how much visibility do you have on that 12% to 14% revenue growth expectation for this year at this point?

Mark, it's a good question. Our visibility isn't perfect, because obviously that inventory setting at our distributors and then ultimately, into hundreds of dealers around the country. But we do have a large sales force that are actively working with our distribution partners. So we get a feel for how the products moving through, both by customer and by region. So we have some feel of it, but it's, but it's not perfectly transparent to us.

Okay. And historically have there, have you generally been if things played out pretty much as you had anticipated or have there been times where there have been pretty big surprises?

So let me say, let me just pick up one way we've addressed the issue of potentially moving our sales volume around Q1 and Q2, and you're not translating into pull throughs at the distributor base at the same time. So we used to have, we used to allow builders to, I'm sorry, distributors to buy 120% of their prior year orders, and that would even load up the channel more early, before the price increase. So, we lowered that to 110%, I know we did it last year, it might have actually been the year before, a couple of years ago.

Yeah, Mike can you say in...

And so that's our, that was an intent to smooth out the Q1 and Q2 by the inventory build that could happen before the price increase. I would say this year, the thing that I'm concerned about really as we go into the beginning of Q2, has been just the weather across all of the countries are cold or down here in the south, very, very, wet. So we need good weather to install Siding on homes both for repair and remodel and in new construction. So I was little bit concerned coming into the quarter, but we still have a month to go or more, well more than a month to ago, and if the weather gets better, which is doing down here in the South anyway, we could see some really good pull-throughs as we get in the second half of the quarter. But, so I would say probably at the end of, at the end of April, a little bit of concern about inventory in the channel, but we'll just have to see how that plays out as we move through the May and June building season.

Okay. And then lastly if I could just on Entekra, can you give us an update in terms of when the commercial facility is going to start up and what we could potentially be seeing from Entekra?

Yeah, so we're, we have, the laws are up for the new facility that we're building in Modesto. We have all the equipment on order and are expecting to get first delivery about a month, four to six weeks from now, which would put us into late June, and then we will start, do the start-up for the automated facility, late July and August. This will be a first for us. Mark as you know, not a first for the management team there, but I'm a little bit hesitant, I'm not as confident to give a projection about start-up as I am on a press rebuild in Carthage, but, so it probably maybe be best for me to provide an update on start-up curve maybe on the next call. But we're full, more ahead on the construction project right now and are targeting some kind of production in August.

Great. Thanks very much.

You're welcome.

Thank you. And our next question comes from the line of Kurt Yinger with D.A. Davidson. Your line is now open.

Yeah. Thank you and good morning everyone. I just wanted to start off on the OSB flowing through the Siding segment. I think it was about 18 million square feet this quarter. As Dawson comes up, would you expect that to kind of rise throughout the year? Or I mean is that kind of a good run rate to think about?

Well, bear in mind that Dawson was manufacturing OSB, this time last year. And it's now ramping up with Siding output. And that, so, yes there will be a ramp up, but not really disclosing any further guidance around our projections by quarter for how that's going to, that expected rate of improvement.

Okay.

Kurt, let me just, your thesis is right though, as we start up Dawson and move Siding orders into that, along with our growth rate, there will be OSB run somewhere either soft Swan or Hayward or Dawson as we move some orders around. But I think that should be a rather gradual start-up and I don't see any big movements of our OSB order file going around plant-to-plant, because of what's been going on in Dawson at least in the near term.

Okay. Thanks, that's helpful. And on the $400 million liquidity target, could you remind us what, I guess excess borrowing capacity you have now and on that $400 million number, is that something you've kind of layered on to a leverage framework from a debt to EBITDA basis or how should we be thinking about that?

Yeah. Thank you. The best way to view the $400 million is, it comprises about $200 million of cash and $200 million of undrawn revolver. So quite separate from that, we do have I believe the capability to incur some more, I'll call permanent debt, which we, we sort of outlined on our fourth quarter call. And we currently, on a trailing five-year EBITDA basis about one times levered in that, with respect to high yield of fixed debt. And I believe with relative ease we could, we could increase our leverage to two times. Therefore incur high yield, maybe another $250 million. But there is no pressing need for that presently, so that hasn't been executed. So the $400 million is cash and undrawn revolver [indiscernible].

Okay, thank you. And then just lastly on the Siding front, I'm wondering how you guys think about stocking positions or shelf space there? And kind of how you view your current position relative to kind of the growth targets you've set out and the different channels you're targeting between repair and remodel?

Yeah. Kurt, that's a great question, let me say, I will start with normal distribution or two step distribution. We've really upgraded our distribution base over the last year or so. And we feel really good about our national distribution network for SmartSide, especially in the traditional channel of distribution for building products. From a repair and remodel standpoint, that much of that goes through our normal distribution channel, but there is a play with once, what's called one-step distribution. We are building that network is under, is being built under way. We have some really good partners and parts of the country but there is opportunities for us to improve distribution at the one-step level. And by the, and let me just say the smooth product offering that we launched was a big part of having a credible presence in repair and remodel. So that we could, we could improve our distribution network for one-step. And then finally, I'll speak to retail. We have really good positions to SmartSide of both, with all three major retailers, the Home Depot, Lowe's and Menards. They all have a little different take on the skews that they like the carry and how, how they, how they measure success as far as our product line. We do work actively with all three of those partners getting, getting our product in front of more of the consumer environment there. That's primarily the day of panel play, so we do, we are running test and have opportunities to expose through that retail, both our lap and trim products as well. So, I feel good, just kind of backup for my answer for second. I feel really good about our access to market in SmartSide, really like our two-step distribution partners that are carrying the product line right now nationally. A little bit of work to do yet, and to shore up that the kind of distribution we'll need to be successful in the future, in repair and remodel. But we certainly have plans to get that done and continue this growth [indiscernible].

Thank you. And our next question comes from the line of Paul Quinn with RBC Capital Markets. Your line is now open.

Yeah, thanks very much. Good morning, guys. I really like that Slide number 6, the LP's transformation, the breakdown. And I'm just wondering if you could give us a 2021 EBITDA target breakdowns by segment and by growth and efficiency?

No. I'm sorry. We haven't gone public with those yet and this wouldn't be the time to disclose that. However, the majority of the growth is coming from Siding, it's SmartSide Strand, without question. The majority of the OEE improvement is coming from OSB, and that was 40% of the 75%. The sourcing savings are spread across the whole of the Company. So in lose color, growth primarily is coming from SmartSide Strand, with some from value-added, OEE improving almost totally from OSB, sourcing everywhere.

Okay. And I look forward to that detail coming forward. And then I guess just on Siding, you guys are growing strong, you've got a couple of other competitors, that are, that are also growing strong, maybe if you could just give us trying to get information on the overall Siding market is, it seems to be very difficult, maybe you guys are in it, so you've got a lot more feelers out there. Just maybe if you could give us an, overall idea that market size and how that's growing and it really how you feel about the sustainability of your 12% to 14% revenue growth going forward?

So Paul,, I think from a market size standpoint, single family's growing with starts. Obviously that's an easy one. It is hard to get, it's hard even for us to get good numbers on expected growth for Siding, repair and remodel. There is all kind of forecast around the general repair and remodel market, but getting that granular of just on cladding or exterior is not that easy. The numbers that we kind of [indiscernible] are the numbers is looking at a long-term trend of 5%, growth there. Some forecasters have it 7%, some forecasters have 3%, some forecaster have it ranging year-to-year between those two. So, it feels like 5% is a pretty good solid number to use as far as repair and remodel. But what we have done this year is do a really good job of understanding size of market in repair and remodel and growth by region. So that obviously the older housing stock in the Northeast, North Central makes for more repair and remodel. And there is more single family starts in the southern tier of the country. So now, where is the growth coming from? Where we see the biggest opportunity right now is really against continued penetration against vinyl. Hard sidings are enough sell to vinyl. We believe it's a lot higher quality siding to have on your home at the end of the day. And contractors and homeowners are looking for an opportunity to upsell and get the aesthetic they want to on the exterior with the home and we want to be a solid alternative to that homeowner who wants to upgrade off a vinyl siding or wood or whatever else is on there right there today. So the market share opportunity, clearly, it's mostly from what is probably houses that are currently or thought to be converted over to vinyl siding, there is some wood out there still. There are some hardboard out there, still that, that SmartSide would be a perfect replacement siding for. So there is a little bit of a myriad of opportunities, but the big one is to continue market share gains against vinyl.

Ashley, thanks. I think that was our last question and thank you everybody for the call today. And Becky and I'll be available, if there are any questions. Thank you.

Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone have a wonderful day.