PotlatchDeltic (PCH) 28 Jul 202020 Q2 Earnings call transcript

Good morning. My name is Megan and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic Second Quarter 2020 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank like now the over call I to Mr. to would turn Financial President opening Vice Richards, Officer and Jerry Chief for remarks. Sir, you may proceed.

and the Thank press welcome will statements. warning to President note comments. in turn and I will conference morning contain Chief the now Executive everyone second website forward-looking quarter Chairman Operating release, with And then Eric can SEC concerning quarter these forward-looking Mike Good in our presentation in the with statements outlook. some I'll earnings our Cremers, and are me filings call. reconciliation the slides, you, XXXX the measures risks With call Officer. and statements. Please room that non-GAAP Covey, on Chief our our on www.potlatchdeltic.com. associated Also, review cover and of over Officer; PotlatchDeltic's our found please to Megan. be second the and at This call results for a Mike

demand. lumber A and to Thanks, American forecast on of illiquidity makes manufacturing period, from markets shifted good few severity It pandemic accurately curtailment of that not capacity signal our duration supply balance effect the lumber the markets COVID possible chain very months and difference a North of earlier to in massive was with this end lumber to a spring. destocking sent the a significant historic visible existing in led the short Jerry, run. a of What a morning. production to

Buying and housing of bode stock rates, which both entering it U.S. lumber of that strong, the sales. the higher strengthened. mortgage to demand, and old industry low and all As fundamentals years spring age Home remodel not but clear cohort for developed, Millennial prime lead demographic well repair remained it Historically, became housing only

It underpins The urban lumber COVID and living atypical of positively impacts to lumber which potential and that reports the increasing demand. the working housing will to for Additionally, run pullback production potential an months current in pandemic constraints, two holiday lumber maybe fire late suburban downtime, housing effect us. shortage to prices. ways historic from led with several continuation the particularly early summer in which of is a now spring shift remotely catch-up likely given unit traditional construction, the of demand, take transportation supply upon season acute

Turning the generated adjusted of to EBITDA we $XX quarter, million.

managing COVID through employees by Our and the the challenges job pandemic. did excellent imposed an constraints

seasonally quarter. three performed lightest Our segments business what well typically our is during

pandemic, a top As safely continue to and our this operating priority is is face we core value.

on discussed the practicable, call, cleaning, of last visitors it's and As quarter screening where added and have vendors. are increased physical distancing we frequency

travel so. all work-from-home group We also and banned meetings to most who employees most continue do can and

and requires have have been to COVID our remains our managers due overtime much for meet mill positive mills by Yellow While operations that thus Lake well running We're to our customer continued sawmills be as cases to as efforts businesses, business Pine's we as employees in our challenging this far, caused stud robust especially treaters. to for to absenteeism The cause a risk particularly in during requirements which actively manage or thank time. Southern pandemic I States' childcare continued could limited demand. lack to our had and to self-quarantine creatively disrupted precautions presents of our COVID The families. safety tracing, want as center home our schedules sold diligence. those work can and their strong benefits contact

prices. August late order files lumber at Our to high currently extended continued

over adjusted EBITDA the expect quarter. third we $XX result, currently wood million a products to As be in

market of in plywood taking resumed quarter. Our downtime facility May after weeks three grade during operations industrial the

customer in Timberlands industrial July. our highest the down posture log we the and stay-of-home returned April. May. our quarter the specialty with manufacture to deliveries orders and the of many the Idaho, RV, Plywood quarter. to and strong in posture remains a used shut the furniture product of plywood boat, resuming orders, was seasonally breakup customers normal industries production to business in in before demand forced reduced harvest quarter balance Sawlog operating our As region in a mode remainder third the and mill and early grade Spring reminder, In at for is operating ran in

second know, our basis. Idaho of lag indexing deliveries our Timberlands XX% formula harvest customers to restarted In volumes. we as operations pandemic prices lumber result third-party the EBITDA As and quarter sawlog mill increase as the progressed. to demand of curtailed due had materially on improved you adjusted the the the about compared expect South, Idaho Therefore, to higher a through sawlog are our they COVID to quarter prices a and pegged

Little approximately development Minnesota June, sell strategy our maximize over approximately to for to of real estate. year. announced We the This is relatively our quarter-over-quarter a of up optimistic XXX expected our there back second business Fund expect the real through acres about cautiously half significant the in we year, estate rural remains we change we do year. $XX will half possibility flat volume sell shortfall in still to harvest less In the remain we Rock. that agreement a all While milestone in Southern million. business, still of an expected. our little be value the the with long-term Chenal anticipate pricing is Sawlog Conservation this making residential shareholder real of XX,XXX lots the estate across than the Valley In to near not sale in originally markets

also been catalyst Our are in conservation completed. and a acres transaction the others more conserve for Fund this has with XXX,XXX once Conservation purposes, partnership than to various Minnesota underway

expect enhance quarter the and our in fourth already will and to sale close position liquidity the We flexibility. proceeds strong the further

of million business expect we company provides good of to an of aggregate $XX PotlatchDeltic PotlatchDeltic $XX stock spent is we've stock. strong purchase to now in years, advantage my turn to favorable Jerry high we share. and including degree share outlook. discuss in quarter. shareholders to flexibility second price the a to $X our back are form we third well-positioned the million value. our extraordinarily and quarter, In last dividends To industry second two at over report take extremely it and liquidity X.X per comments, returned shareholder of shares to results quarter the as of maximize conditions and the strong million I'll of seek million to wrap-up of During purchase average $XX the repurchases, fundamentals

sawlog I'll million million color exceeded logs tons This higher of $XX.X Page the Northern compared was down in EBITDA displayed adjusted compared is million slightly in to by in deliveries quarter. of higher prices we as expected Having the the each quarter. $XX.X second compared the Starting harvest In first lumber said a and of of through decrease on our the Sawlog seasonally the quarter. due tons Slides the higher lower second volume for in second the the as increased basis our the each quarter with and to Timberland is normal XXX,XXX X, expectations month EBITDA Information you, of the our segment harvested taken XXX,XXX now quarter quarter. North in in harvest and first curtailments for during index shipments per were is X provide both the prices breakup The segment's due mill quarter. $XX on market harvested customers. the during sequential that, was in prices. density review decline in the in effect that operations. in third-party more second Idaho. results. to quarter the to Thank million first X% slides, prices sawlogs the a seasonally lower sawlog A quarter the the restarted operating mill second adjusted first Mike. positive segments their $XX.X on normal from result and X We customers Spring south, in the the was quarter. quarter second volumes to our ton were quarter seasonal quarter-over-quarter

the second to lower prices the quarter. Our compared in Southern were sawlog X% quarter first

X Turning the EBITDA second and in $XX.X the X, in XXX quarter million first in on XXX Slides quarter million second board adjusted feet the was compared quarter. first to the feet from declined $XX.X in million to to board products, wood shipments Lumber million quarter.

lumber lost tornado the caused Our quarter constrained due the end at pace power sawmill in hours April, particularly Arkansas week multiple overtime of production hours we a outage. when production of our reasons, of increased. We mill a production resumed near when to orders the Warren, in April for were

To in our prices feet board realization the in per quarter price provide is feet X% increased second to lumber the lumber helpful month. per average $XXX context, to at from look board thousand quarter. it $XXX thousand first by Our

Our were $XXX average average $XX in feet than the higher lumber April, accelerated below thousand price our first average. June to quarterly realizations increased per in in or and May, modestly board quarter

undrawn. availability rural includes Moving are liquidity the million quarter, XX, Valley XX the increase cash EBITDA at to real the to acres on estate $XXX segment's the which remains $X.X log offset total Shifting Slide in million sales. first adjusted strong in in XX, slightly compared Chenal more second on Slides revolver $XX on an million amount which and $X.X was our This our items sold lower than and remains financial summarized million. of quarter

quarter. We $X to XX,XXX December shares this in an average Annual decline in share. per second mentioned, expense $XX debt quarter second $XXX,XXX plan XXXX Capital to were of the of mature expenditures December. As interest in scheduled we interest spent the million million on $XX.XX will to refinance beginning Mike for approximately $XX.X locked and purchase have the million debt rate. in

return flow compared $XX that projects and expect high-level will outlook Slide some capital which pull quarter. I to options third development we're are While XXXX, million presented include included that comments. expenditures, provide estate to the operations planned are to we be to on in seasonally million this our quarter XXXX higher The on second the Note from mentioned cash now the in cash Harvest Timberland north acquisitions. statement volumes XX. exclude amounts some are year. details in in real high will to currently our the be forward mill $XX just reviewing I expenditures

seasonally. to to We expect significantly prices. expected due the increase quarter the primarily third the to third higher are South in increase in Higher volumes indexed in prices sawlog quarter Northern

third We comparable expect an Southern the sawlog continue prices the accelerated to to increase at in quarter pace. Lumber to prices be second quarter.

higher prices price. Our that approximately far, average late XX% extend than average is our thus August, lumber quarter orders including into lumber second

basis. feet annual quarter. per lumber board Valley an change to $XX approximately expect of million EBITDA of We thousand $XX ship in a quarter. in reminder, XXX to foot plan to us million approximately lumber third a estate, Shifting XX for XX,XXX in As XXX equals acres price consolidated real of lots land the the third Chenal board we XX,XXX sell to and rural on

including expect in land, now to that Minnesota For expect the XX,XXX acres June sell close the all XXXX. close transactions now contract announced our rural year, fourth XX,XXX acres of in Virtually expected and acre we to quarter. XXX,XXX through under to in in Minnesota XX,XXX are to the of we remaining transaction

bulk sales future. Minnesota, shift the of in historically rural Arkansas to the we in the that the that Given acres land the were of rural will sold program focus

including take Idaho Overall, significantly having reminder, community. to Valley included value open XXXX due third Deltic Rock, as will portion I'd adjusted identified the to the a to the remains seasonal third higher volumes, quarter damage well-positioned economy. primary proximate to We higher as concludes our our higher COVID a now to acres approximately disrupt potential lumber three risk prices, at to increase the believe to outlook the our operations pandemics well Megan, or that very We're call Timberlands, Chenal remarks. total we shipments. of lumber favorable the merger second a That indexed As higher to be Little than in sawlog that than that prices, XX,XXX achieving Masterplan advantage as times cause further EBITDA including harvest Q&A. to quarter, estimate and like prepared industry least fundamentals. quarter we

Your Babcock John Bank first America. comes with of question from

is Your line open.

indicated. a to I Hey, over about and of obviously weeks the detail for you Starting all couple here. good seen talk out clearly the We've prices. want thanks morning, rise last lumber sharp providing which

is ultimately levels some was likely I it you're share so how here pricing And you wondering could trends at see whether and from you and how work? driven to supply about reversal if in what demand or factors that point, drive these is thinking might

John. Yes,

about Eric. So with XXXX prices, is QX starts. very our XXXX prices this footing expected driven than largely our is housing solid better this QX higher -- by than we began X% Well, on

moving even hit in were prices represented mentioned, for then industry, in buying Recession. million, lumber and a by housing the billion some the the as Mike were And billion curtailment as liquidated that market. X% Great you dropped people to they the of stopped $X.X the range into saw, curtailment capacity our Forecast for since starts much late XXXX XX% $X.X the XX where highest QX, And and roughly as of capacity, industry off million XX about came March. then pandemic board inventories. feet reporting massive April in from And customers

their with nothing and they with time, for very do, So projects. remodel outdoor the in weather millions has to repair across did resulted the been do people Furthermore, U.S. favorable projects. of well basically pandemic home turn R&R they to what at then staying

much up. prices didn't really expected collapse demand So nearly as as and firmed

impacted Our a over was X% over was and but up were June X% then total heavily relatively that by QX, prices in up April. over low May lumber QX May, April up XX% was

Reese down you of give it, to for just billion to board they three be be it to billion down expected X sense year. North X American demand now months about expect feet. ago, the Just board And a feet

were X% down expect them be And so going and year-over-year up year-over-year. X% to thought while before R&R to they be now expenditures roughly

huge, a huge So you've had change.

predict. -- lean time But the channels. So through selling. know that in we're this have very know, quarter to they're hard two-thirds are point through prices you very our QX, visibility lumber as good we very into here distribution roughly as at inventories We are with

Our long order and very very files demand firm. remains are

So up as script, in QX. the Mike XX% QX roughly prices over call are and Jerry mentioned

probably to a is fourth to that pressure see the probably going question seasonal get R&R going you're see is as typical construction. What's quarter. by home is QX? That but real start going unusual. to see you You will the into likely wouldn't some be pricing So slowdown. offset happens we to what probably are new And happen to in work slow,

the And past for been strong, you've results. days, been the of very, builders If orders following up June couple example. year-over-year, XX% very have their releasing are their

starts increase R&R decline. So hopefully are roughly R&R to is continue new offset to going the going but to starts come home the and down

So help answer your question.

typically mean, I kind on prices back Yes, typically of bounce because we spike yes, I it when and partly. like see side like some in I the sort was There's of obviously maybe guess, it. this of other continues higher.

is out, was so I'm the might generally, whether that lumber's if of the question -- And comment kind market cause market enter what And any had of guess a you that you're supply I which just at any taken might of answer point, But supply supplier guess being help new helpful. for obviously could the kind and I that. trying on this next seeing be in might get sense just kind partnering I maybe that. the what's to

think plateau And any I guess possibly you a seeing that XX% slowdown? running come curtailment no I conversation can sign that previously, I all in had department said, of any I a has the a not. back of on. these that hard But of as of and absolutely Yes, signs said prices. mentioned would There's is with are hey, they as Everybody, they yesterday given sales here. that

at you CME, rally. continuing fact, see prices lumber you In to futures on if go the that are look

thing this produce you So it you're any if lumber. using had there's no whatsoever, sign to over rolling capacity and of lumber

that supply challenging I scheduled and the any are run startups run They're don't environment already. more people. would to or COVID restarted a Mike. new down shifts it's to mill been No, more time is think this due down Mills constraints. have log add to there's Canadian John, in over to

I is So is. supply think the it what

by impacted ultimately you constraints? have percent the Do log what has market of sense a for been the

what? the By

log constraints? the By

By log the log constraints, availability?

reported bit to downtime to like market X constraints. log curtailments Eric relates billion billion. around it is feet been shut is it's the Western this mean to log was of mentioned as ago that the commonly Canada Jerry what's mean, speaking obviously response capacity I John, said about permanent roughly supply really down question I in a but curtailments due XX% that the temporary terms in in I X just of board was

up Okay. down And are those at the of back you this of and all point? said that went XX% that basically running

all, Virtually yes.

I the you question, I volumes about it next the just like mean I are then And quarter. it if Southern resuming I that wondering before kind guess in and changes market rise the those well. particularly talk seems over; just during sawlog decent end to kind seen now an of was guess curtailments can of Okay, and pretty prices still notable markets. any turn with production? lumber you coming Have I in

detailed a Southern make can change between and does of not band remain comment a constraints I'll Southern Well, to then and and quarter-over-quarter. weather through a thick log Eric revert ton normalize just spikes get and general and prices they due color have while It's and and they markets kind narrow thin, and it. of small $XX pricing The log very again. temporary we story quickly to add $XX -- harvesting in

to that, know one a Yes, the John, I only drain covered month the in thing to they webinar, I the topics is growth hosted and FDA ago a of U.S. would add just don't was

to seeing timber you're are that inventories is and increase South continuing what in U.S.

South.

it's hard demand the up. supply demand, end incremental that's to the as of growth turning got you've see as or prices volume, It's all and it's at hard. day. long And So outstripping harvest about

the our with position that returns company manufacturing trees capture I'll can we I stable large this a think these and strategic well. The dividend. Southern especially I our to provide we Products adding is the unique just grow continue that's in to of margins, Wood by environment with benefits the think in one support converting of So business business, have and

Our BMO Ketan Capital next Markets. with from Mamtora question comes

open. is line Your

but obviously, months back, Well, from how different a that's goes much three discussion it sometimes.

incremental in maybe now some into pulling into running Maybe question, don't are you all getting at the projects you're First if FY increase we mentioned sense looking projects of from to this give point, that us sawmills have just And back on remarks room prepared maybe maybe what are just what specifics, kind XXXX. your side? the without XXXX into -- just of you kind pull you'll but of non-overtime, XXXX? some at from lumber forward comfortable feel you capacity

Yes.

So Ketan, this is Eric.

at looking are projects a number of here. We

board roughly decreased this We product our million. it things would increased totals make that far the it want business of improved production so yield, And about haven't don't labor grade to the myself. costs, I to yet, volume, improvements But get too talked to ahead like mix. $X include expanded

So They're incremental about about there unusual mill of a Greenfield projects. not mills. all or at that. these is and anything talking nothing extraordinarily kind margin, existing like the We're

And because for to would that yet But, to in anywhere would about from call, find that January And our would ordinary out not So X% the to we volume of don't provide get some want is don't our expect but the asked that volume I about announce we're but XXXX. spent production X% incremental you more on see come volumes of we'll a get to I some I way year, -- give to going volumes. this year, it early of some Every every about question prepared money, in guidance, spent think XXXX of than XXXX a color next year. mills million, higher us production production out $X be projects. gains. to roughly eke Ketan, those would next that that talk

Got it.

Okay.

that's So very helpful.

things there reduce So is capacity, that you that mills do existing at still your think room all costs. add can you and

is You still think there? there room

million you than this higher forecast, is with just last this X% this that, absolutely. be we know, to -- our year, which be Yes, will I'd did year year remind what expect you even we What COVID. was But and take That took us. we for year, this year to feet out to we had of roughly due XX record production QX that overtime a in out QX.

to extra year, have So in mills if XX next margin that going our million we're get feet. we

of a And up? imports any Got do seen the prices second, rally it. go from with Europe lumber to sticking for we've for you that is just That's in helpful. then risk there think lumber with kind

Yes. in I XXX,XXX, helpful. the at domestically. them talking bit it produce I can this lot here, might of higher. has I now mean, the market maybe feet. Europe a is dollar is that be there bit lumber board measured that on this here now, more more go or way, more see mean, quality being past think I the XXX,XXX, There into little a of for we're is over pushing roll I you're to And XXX,XXX which isn't which think room which two. a about they year year-to-date margin is down Central to appears it's what little is the by The produced think is But room. starting been for whole the not And as high lumber terms lumber.

higher. higher? think Can go I it So think it I don't go a can lot so.

you big think But and helpful. to much capital windfall April have we to from how sort obviously And the now? That's things then a point capital do right May are all QX, in turning allocation priorities, seeing you given have we from have at what talked of it. lumber how allocation will what prices. about Got this just safeguard changed

this Well, is Mike.

such times You cyclical been market the in a many past. with -- can't and this lumber through we've get

or increased dividend whether XXX% we've Idaho. in dividend come all acquisitions that changes through our I can't from stream, carried in as those earning almost a of away our about Timberland these or increases XXXX. in And periodically. You since sustainable big increases get our with guess, recovery, it's fallouts happen have price reminder, especially

about just that can. the all refinanced have debt We we

mature tranche at that that refinance. end this will have, we'll the year left as mentioned, Jerry small of of $XX million one We

purchased XX% capital mentioned, million start we appreciated handful as of have to we small projects stock $XX And pull to priced stock, And at we'll since prior has of forward. of that Eric that, QX. $XX. worth a Our try the just

really sense had make the and comes for history to patient doing a being waiting of down company to That's and it So the we've and that looking to grow and Timberland for dividend. grow looking what opportunities those.

where that's will better focus So our these shift in markets.

Weintraub question is Mark Seaport next Our Global. from with

line Your open. is

but Thank you. answered. of majority questions, Had a great been slew the have

as contemplate kind of have third using $XXX and you Would about what the and like it of the thinking or as that past growing ability to capital little sorry, its So you was in conceptually you million capability peripheral, business about Would shift to using a -- when a underlying dividend question cash the that that Hopefully, clear? question thinking the cash? dividend timber perhaps. your potentially timber north base? allocation of acquisitions, cash to dividend bit think about quarters of talked slowly match are building the generating over But increasing core all you bank Timberland the cash. dividend opposed holdings time quarter you're growing amortizing and the generating the the to of on either you just in of the as that you EBITDA you've noted, the or kind essentially generate wanting

No, discussion have we with I question. a the It's that board. understand periodically the

when generated Wood EBITDA good it's in as business a choppy; I markets as think are have $XX million XXXX recently Products total. to so reminder in back whenever just our look we these that

underpin And change Minnesota, we're going premise that. give help find sit sense. a to So to returned the shareholders. more why And needs can't from excess sale do part very We -- think increase time cash the dividend have things of acquisition cash dividend can forever. support to opportunity or of have certainly makes on that's in this that It to we've we things I confidence the the and Timberlands that kind would to to certainly really be quickly. had an certainly, dividend can way earning stream. be increasing us would one over And the if with

update Makes happening all to on any what sense. be might certain And provide trends more any different that in about to anything Chenal And and are color us, recent changes? can these there be Valley about? that think if might you then

anywhere. frankly everybody Mark. in Rock. of sales year, expected. in back our the hit, Eric, would hearing estate, had such we are activity product start would thought to up holding the have be come lot our residential in would estate What than completely is business in we pandemic. This additional XXX I because year, When is been with we will better but to commercial that am lot very we think is performance be happy going certainly, XXX given The are you real something interest less collapse. of know, tell Chenal is holding that below surprises tell Chenal. real But And is the had And expecting, we earlier than to of there the activity what expected we to now like that. a would hot guided you than don't in I we're guided XXX, at and Little there would and I I they better the the coming expected up I me And commercial that that there it commercial kicking around Chenal, it which sales pandemic

Chenal is with along. pleased how we're coming So very

comment et almost Are Great. next up now about hear to could lots, setup And on with seeing have it all to getting or -- ground improved that for more aggressive, buying any early might year cetera. the is next homebuilders talking sort evidence you you about too make I of the year to that? be it that better expected could prove

certainly to would give sure. when Yes. our we'll next right precedent XXXX. the guidance given that's would this year I I now, fourth results. a looking at that to quarter give But we in guidance expect -- hate for for I'm release than I We've what got January better year, for year be

Our Davidson. Chercover D.A. with Steve is question next from

open. Your line is

you. Good everyone. thank Yes, morning,

It or QX. least treated the pertains and question will first to like closes be you're extraordinary. going my income accurate? through it Minnesota in that looks Is statement enough that that run it to So at that it's not big sale as

Steve, is Yes. this Jerry.

actually So through income the statement. it run will we

expectation my is rural most see the larger would cost all we it certainly some sales have real estate But of revenue from is, Our just as mean, land you than I rural well. time-to-time, and this and sales in run certainly a pretty large estate through transaction, large other like sales. memory. real

running scoring I'm it how least at on internally, it I'm normal planning So through results.

respect in the to some commercial volume restrictions With the Okay. ease they three with of continue as group, to guidance Well, we'll manage have conservation that future market? or development will to or obvious out timberlands is months. as good it

is I No, think Eric. Steve, -- this

I continue think their timberland. operate it to as is intention to

will in likely. they a conservation these a the Not to continued groups. harvest flip They hold But outcome conservation to be properties with other this all have Now tendency land? activity. likelihood, will

Got terms you basis contribution you. been on Which not EBITDA? what is annual that tell an Can us thing. in making maybe bad a the of financial it's

track that, the it's land estate think land Timberland is And of fact, term contribution, In would rural the our you time business a Steve. covers see in record certainly, cost, pretty in much I think can about Minnesota, over pretty it way really Minnesota we real about Timberland contributor, sales. play. When be Yes. nominal on holding

think -- about that be the appropriate think I So it. way more the would to

Nice future EBITDA. for change lost no chunk of So reference.

to there parabolic QX? such on is lag have prices log since a that substantial that Idaho. prices in we're does to QX, in extraordinarily log strong gears lumber in we're going imply going and still Switching Since Okay.

log very I'd kind play seeing is, in the Well, range. all XX% prices, you yes. what how in XX% now depends prices It out, plus of QX, But we're right kind of lumber tell strong on certainly Steve.

So would we'll pretty well. to I strong how as plays But out. see QX QX expect be

Well, lag, is how the long Eric?

It's six weeks. Six weeks.

Got weeks. Six you.

some So on got at lumber should first if then end you've see of almost September the dynamite least at of pretty visibility the pricing? QX half

Yes.

nonetheless, against the You'll fourth start logs work us to still per on basis. as density strong as into the quarter. But factor a log denser that pricing QX in see ton get we really expect get we

prices, as mix. log make which nice you a had up also know, XX% we've Cedar on about And of uplift our

you. Got

think and kind can to another XXXX having do phenomenal Okay, anything how is pricing ending? or change knowing seasonality? try from go feast that alluded start in -- famine. learned due things so the any we million to recently, out EBITDA final experienced in prevent you good there industry Mike a to lessons question. even $XX that, you lumber it though back can quickly of and just Is XXXX, to with bobble after And the unhappy maybe And of

won't supply we Yes. kind of and industry just red and antitrust that to flag, demand an make just We're about It's touch going comments not fundamentals. won't we -- question.

All push right, then I won't it.

Well, congratulations you. safe. Okay. and Thank stay

Thanks.

Thank you.

RBC Markets. -- final Paul with our from Our Quinn is Capital question next

open. line Your is

with Just I starting guess, the Products. Wood

adding it? you you to trying Just XXX. of And to to prices guidance can, I would I you've doing higher run shifts to here, as overtime XXX not, this as mean, have lot have unprecedented if much understand lumber the shipment that. capability and than given a been the thought

So XXX XXX. Paul our to Yeah, is guide

I can strong possibly possibly as is mills we are that that chance hard a that can. And as and running think there we we we our we're shipping pretty number. everything beat

Okay. number with? it you What seen above. and stud, random that guys we've sort versus I where now popped years associate in you like has do XX:XX are that of a been, guess, a stud And then of shift huge just, down lot

But million demand XX% I is the cannot not just can't Well, we we of purposes. our keep with mills -- large two it's up Great XXX feet it. center and for related purposes; each stud product DIY to to out It's going where it's more XXX think a I studs, home center construction degree going of don't demand. those for produce, than of the home absolutely million of know mixes, to Lakes

Okay.

So saw between of year given slow down, ago? will do a what comments in you we new expect seeing interplay and sort home then we think revert repair your to and you're a construction, prices stud back but random pickup remodel to that that

know. impossible don't I to there. It's going happen predict what's to

stud all think record prices levels. I are time at

that assume continue to So not forever. you'd have that's going to

on just Okay. that maybe And what's plywood then the your quarter? business through on come back an industrial update as going with

on like order put be. to to we'd out But like extend demand the it performance. like sales We'd as quarter. plywood, It's second third it money market the would working, as to is not the the money in first better but We the we is overtime, definitely in to money we'll we in where and The quarter better. in make hard is gotten team to. trying and furniture lost file -- conditions not Well, quarter needs still mill made back yes. running

market is pressure, there still are that is better. but So getting under it segments some

quarter Looks Excellent. luck. Thanks up Best much, coming of great here. like guys. so a

you. Thank

Thanks.

with is Markets. question final Our BMO Ketan Capital from Mamtora

line Your open. is

how I'm special to How the Thank sort of absent about you want and about to one-time you regular just about you've share it? allocation you kind do think dividend? and M&A, of think about repurchases. come dividends you. capital curious, do kind of been I how think pretty again, clear back dividends sort or of

money discussed to give it's with think Well, can enhance don't them. and get come quick long-term to it to But credit special for and resort I and returns, cash And create time can't to. do shareholder a to market returns. done. put the the we our in I ways And perspective, any up job I dividend but speak you It's time I that last it. my the we've work doing Board, to that. And and think we'd to for work to be doesn't the put would think it it's forgotten that I to find to absolutely the us for

over turn At this there to the questions. Richards. back call are more time, I'll I'm Jerry no now showing

Megan, good modeling Thank following participation rest for a day. day, forward detailed and any right. has you. the everybody on be to type your everyone on questions to thanks call. of hope and up soon. available the All the you Look Talk

conference This today’s concludes call.

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