What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-19 compared with 2024-02-14 · 28 added, 37 removed, 229 unchanged (22% of the section changed)

2 unchanged sentences

The principal customers for our building solutions are retailers, wholesalers, and home building and industrial businesses in North America and South America, with limited sales in Asia, Australia, and Europe.

Since our founding in 1972, LP has been Building a Better World ™ by helping customers construct beautiful and durable homes.

Since our founding in 1972, LP has been Building a Better World ™ by helping customers construct beautiful, durable homes while shareholders build lasting value.

We are headquartered in Nashville, Tennessee, and as of December 31, 2024, we operated 22 plants across the U.S., Canada, Chile, and Brazil.

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OUR BUSINESS SEGMENTS

We believe that we are the largest producer of engineered wood siding in North America.

Our Siding segment serves diverse end markets with a broad product offering, including LP ® SmartSide ® Trim & Siding, LP ® SmartSide ® ExpertFinish ® Trim & Siding, LP BuilderSeries ® Lap Siding, and LP ® Outdoor Building Solutions™ (collectively referred to as Siding Solutions).

Our Siding Solutions products consist of a full line of engineered wood siding, trim, soffit, and fascia.

We believe we are the largest manufacturer of engineered wood siding in North America.

Our Siding segment serves diverse end markets with a broad product portfolio of engineered wood siding, trim, soffit, and fascia, including LP ® SmartSide ® Trim & Siding, LP ® SmartSide ® ExpertFinish ® Trim & Siding, LP BuilderSeries ® Lap Siding, and LP ® Outdoor Building Solutions ® (collectively referred to as Siding Solutions).

As compared to solid wood, these products offer superior protection against hail, wind, moisture, fungal decay, and termites.

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We intend to continue growing sales in our Siding segment and to increase the breadth of our Siding Solutions product offerings.

To do so, we plan to increase the production capacity of these high-margin, value-added products through the addition of new plants, additional conversion of existing Oriented Strand Board plants to Siding manufacturing plants, expansion of our capacity at existing Siding facilities, and expansion of our prefinished capacity and offerings.

To do so, we plan to increase the production capacity of these high-margin, value-added products.

We have several options for increased capacity, including the addition of new plants, conversion of existing Oriented Strand Board plants to Siding manufacturing plants, expansion of existing Siding facilities, and expansion of our prefinished capacity and offerings.

We will also seek to drive continued product innovation by utilizing our technological and engineering expertise in wood composites, overlays, chemical treatments, and durable and beautiful paints to better address the needs of our customers.

In May 2023, we acquired an idle manufacturing facility in Wawa, Ontario, Canada from a third party for $80 million.

We anticipate converting the Wawa manufacturing facility into an LP ® SmartSide ® Trim & Siding mill in the future according to the needs of our business.

We are evaluating project schedules and market demand to determine when we will begin related construction work.

Oriented Strand Board (OSB)

OSB is a structural building panel product made from wood strands, arranged in layers, and bonded with resin and wax.

Developed as a less expensive and more sustainable alternative to plywood, OSB is used as roof decking, sidewall sheathing and floor underlayment.

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We believe that we are the leading producer of OSB and siding products in South America and that we are positioned to capitalize on the growing demand for materials used in wood-based residential construction in South America.

Our LPSA segment manufactures and distributes LP OSB structural panel and Siding Solutions products in South America and certain export markets.

Our LPSA segment manufactures and distributes OSB structural panel and Siding Solutions products in South America and certain export markets.

This segment also sells and distributes a variety of companion products to support the region’s transition to wood frame construction.

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We believe that long-term market trends and demographics suggest continued growth in demand for sustainable engineered wood siding in these markets, which we believe we are well-positioned to meet.

During 2023, we completed the conversion of our existing OSB mill in Sagola, Michigan into a Siding Solutions mill.

This conversion provided our business an additional 300 million square feet of Siding Solutions capacity.

In 2023, we also completed the construction of our new ExpertFinish facility in Bath, New York, which added approximately 55 million square feet of ExpertFinish capacity.

Additionally in 2023, we acquired an idle manufacturing facility in Wawa, Ontario, Canada.

We anticipate converting the Wawa manufacturing facility into an LP SmartSide Trim & Siding mill in the future.

Following the conversion of the Wawa facility, we anticipate adding Siding Solutions production capacity through an expansion of our existing Siding Solutions mill in Houlton, Maine.

We are evaluating project schedules and market demand to determine when we would begin related construction work for both the Wawa facility and the subsequent expansion of the Houlton facility.

We routinely evaluate project schedules and market demand to determine when to begin related construction work on Siding Solutions capacity expansion projects.

Generate Value-Added Sales Growth Through Customer Focus and Innovation.

We believe that our products help our customers and end users to mitigate various challenges associated with building and construction activity, including labor shortages, because they are relatively easy to work with and allow for the consolidation of multiple steps into a single product system.

We believe our marketing programs aim to drive awareness of our products and a greater understanding of our products’ specific features among builders, repair and remodel contractors, industrial manufacturers, and major home improvement retailers.

Our marketing programs aim to drive awareness of our products and a greater understanding of our products’ specific features among builders, repair and remodel contractors, industrial manufacturers, and major home improvement retailers.

Through our sales efforts, we target customers by distribution channel and focus on providing them with a broad array of traditional and specialty building products coupled with quality service.

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We believe that investments in this region can continue to be funded by cash generated by our LPSA segment.

Investments as a market leader in this region should allow us to capitalize on demand while diversifying our revenue mix and market cyclicality.

Investments as a market leader in this region should enable us to leverage demand while diversifying both our revenue streams and exposure to market cycles.

Our sales and marketing efforts are primarily focused on traditional distribution, professional building products dealers, home centers, third-party wholesale buying groups, and end users, particularly home builders, industrial manufacturers, and repair and remodel contractors.

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We seek to maintain a broad customer base and a balanced approach to national distribution through both wholesale and retail channels.

In 2023, our top ten customers accounted for approximately 50% of our sales.

In 2024, our top ten customers accounted for approximately 49 % of our net sales.

Our principal customers include the following:

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• Building materials professional dealers that specialize in sales to professional builders, remodeling firms, and trade contractors that are involved in residential home construction and light commercial building;

• Retail home centers that provide access to consumer markets with a broad selection of home improvement materials and increasingly serve professional builders, DIY remodelers, and trade contractors;

• Off-site structure producers that design, construct, and distribute prefabricated residential and light commercial structures, including fully manufactured, modular, and panelized structures, for consumer and professional markets.

• Retail home centers that provide fully manufactured, modular, and panelized structures, for consumer and professional markets.

OUR COMPETITORS / COMPETITION

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To maximize our effectiveness in the marketplace, we have a centralized strategic sourcing group that consolidates purchases of certain materials and indirect items across business segments.

The goal of the strategic sourcing group is to develop global strategies for a given component group, identify vendors and suppliers that meet our business requirements, and develop long-term relationships with those vendors and suppliers.

The goal of the strategic sourcing group is to develop global strategies for a given component group, identify vendors and suppliers that meet our business requirements, promote a competitive pricing environment among our vendors and suppliers, and develop long-term relationships with those vendors and suppliers.

By developing these strategies and relationships, we seek to leverage our material needs to implement leading practices, reduce costs, improve process efficiency, improve operating performance, and ensure continuity of supply.

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Resin product costs are influenced by changes in the prices of raw materials used to produce resin, primarily petroleum products and energy, as well as competing demand for resin products.

Currently, we purchase most of our resin from five major suppliers.

Currently, we purchase most of our resin from six major suppliers.

However, there can be no assurance that pricing or availability of resins will not be impacted by competing demand or supply chain disruptions due to significant weather or other uncontrollable events.

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We attempt to mitigate our exposure to energy price changes through the selective use of long-term supply agreements.

Our business is subject to seasonal variances, with demand for many of our products tending to be higher during the building season, which generally occurs in the second and third calendar quarters in North America and the fourth and first calendar quarters in South America.

Our business is subject to seasonal variances, with demand for many of our products tending to be higher during the building season, which generally occurs in the second and third calendar quarters in North America and the first and fourth calendar quarters in South America.

GOVERNMENT REGULATION

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Additional information concerning legal and regulatory matters is set forth under “Risk Factors – Legal and Regulatory Risk Factors” in Item 1A of this annual report on Form 10-K.

We are subject to income taxes and other corporate taxes in the United States and foreign jurisdictions.

We are subject to income taxes and other corporate taxes in the United States and multiple foreign jurisdictions.

Our provision for income taxes and our effective tax rate could be affected by numerous factors, including changes in applicable tax laws, interpretations of applicable tax laws, the amount and composition of pre-tax income in jurisdictions with differing tax rates, and the valuation of deferred tax assets.

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Future legislation or regulatory activity in this area remains uncertain, as does the potential impact on our business and operations.

We are committed to complying with all applicable environmental laws and regulations and intend to devote significant management attention to such matters.

We are committed to complying with all applicable environmental laws and regulations and intend to continue devoting significant management attention to such matters.

In addition, we occasionally undertake construction projects for environmental control equipment or incur other environmental costs that extend an asset’s useful life, improve its efficiency, and/or improve the property's marketability.

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WIR tracking reflects the severity and frequency of incidents to monitor our safety performance.

The SIF prevention program and WIR tracking enhance hazard recognition and employee engagement and drive our teams to evaluate controls to ensure we are incorporating improved levels of protection whenever possible.

The SIF prevention program and WIR tracking program enhance hazard recognition and employee engagement and drive our teams to evaluate controls to ensure we are incorporating improved levels of protection whenever possible.

We use this data to prioritize, manage, and carefully track safety performance at all our facilities and integrate sound safety practices to make a meaningful difference in every facet of our operations.

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We embrace the diversity of our team members, customers, stakeholders, and consumers, including their unique backgrounds, experiences, ideas, and talents, and are committed to continued efforts to foster an inclusive workplace.

All LP team members are valued and appreciated for their distinct contributions to the growth and sustainability of our business.

We believe all LP team members are valued and appreciated for their distinct contributions to the growth and sustainability of our business.

We strive to cultivate a culture and vision that supports and enhances our ability to recruit, develop, and retain diverse talent at every level.

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We are committed to recognizing and rewarding the contributions of our valued employees while continually working to develop, engage, and retain our workforce.

We focus on the team member experience, removing barriers to engagement, further modernizing the human relations process, and continually improving the equity and effectiveness of all talent practices.

We focus on the team member experience, removing barriers to engagement, further modernizing the human relations process, and continually improving our talent practices.

Our talent development programs provide employees with the resources they need to help achieve their career goals, build management skills, and lead the Company.

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We strive to provide competitive compensation and benefits programs to help meet the needs of our employees and offer the flexibility, inclusivity, choice and protection necessary to retain top talent.

While subject to change, our current benefit programs may include, depending on country/region and employment position, stock-based awards granted pursuant to our stock award plans, awards granted under our annual cash incentive award plan, a 401(k) plan or defined contribution plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family medical leave, paid parental leave (maternity, bonding, adoption, and surrogacy), an employee emergency support fund, tuition assistance, and scholarship programs.

While subject to change, our current benefit programs may include, depending on country/region and employment position, stock-based awards granted pursuant to our stock award plans, awards granted under our annual cash incentive award plan, an employee stock purchase plan, a 401(k) and profit-sharing plan or defined contribution plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family medical leave, paid parental leave (maternity, bonding, adoption, and surrogacy), fertility benefits, an employee emergency support fund, tuition assistance, and scholarship programs.

We also provide our employees and their families with access to a variety of innovative, flexible, and convenient health and wellness programs.

These benefits provide protection and security so employees can have peace of mind concerning events that may impact their financial well-being.

In addition, we offer employees the ability to customize benefit options to meet their individual needs and the needs of their families.

In addition, we offer employees the ability to customize benefits options to meet their individual needs and the needs of their families.

SEGMENT AND PRICE TREND DATA

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Housing Starts

We monitor housing starts, which is a leading external indicator of residential construction in the United States that correlates with the demand for many of our products.

We monitor housing starts, which is an indicator of residential construction in the United States that correlates with the demand for many of our products.

We believe that this is a useful measure for evaluating our results and that providing this measure should allow interested persons to more readily compare our sales volume for past and future periods to an external indicator of product demand.

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Sales Volume Information Summary

We monitor sales volumes for our products in our Siding, OSB, and LPSA segments, which we define as the number of units of our products sold within the applicable period.

We monitor sales volumes for our products in our Siding, OSB, and LPSA segments, which we define as the amount of our products sold within the applicable period measured in million square feet (MMSF) on a standard 3/8" thickness basis.

Evaluating sales volume by product type helps us identify and address changes in product demand, broad market factors that may affect our performance, and opportunities for future growth.

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Our SEC filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov.

In addition, we will make available our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act through our Internet website at http://www.lpcorp.com under the “For Investors” tab as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

In addition, we will make available our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act through our Internet website at http://investor.lpcorp.com under the "SEC Filings" heading of the“Financial Information” tab as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Information contained on, or accessible through, our website is not a part of, and is not incorporated by reference into, this annual report on Form 10-K.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following list sets forth information about our executive officers.

The following list sets forth information about our executive officers who are elected annually by the Board of Directors.

All information is as of the date of the filing of this annual report on Form 10-K.

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Southern served as Executive Vice President of OSB beginning in March 2015, Senior Vice President of Siding beginning in 2012 and Vice President of Specialty Operations beginning in 2004.

Blosser , age 62, has been Senior Vice President, Manufacturing Services since July 2017, and previously served as manufacturing manager for the Company’s Siding business before becoming Vice President in June 2007 with responsibility for the Company’s corporate safety and environmental efforts, as well as the forest resources division, procurement and logistics.

Southern has also served as a member of the board of directors of GMS Inc.

GMS) since January 2024.

Southern also serves on the boards of directors of The Forest Products Association of Canada and the Nashville Branch of the Federal Reserve Bank of Atlanta.

Daniel , age 56, has been Senior Vice President, General Counsel and Corporate Secretary since September 2019.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business