Oct 29, 2026 earnings call — Mill curtailments and Q3 results
Curtailment of Huguley OSB and Leola lumber mills; Huguley capacity is 500,000,000 sq ft.
Revenue $1.4B (est $1.4B) · EPS $-1.03 (est $-0.84)
Key quotes
"Subsequent to quarter end, as outlined in our announcement last night, we have taken steps to better align our operations with customer demand with the indefinite curtailment of our Huguley OSB mill in Lanett, Alabama, and our lumber mill in Leola, Arkansas."
"We exited the quarter with just over $200 million of cash, an undrawn $1 billion revolver, giving us liquidity of approximately $1.2 billion, and a net debt to capital ratio of only 6%."
"Diesel costs have increased by approximately 80% year-to-date, which represents an increase of approximately $15 per thousand board feet on our lumber's log costs in both SPF and SYP."
Analyst Q&A 5
debt increase and 2027 outlook
Q (Ben Isaacson · Scotiabank): Why did you raise debt and increase liquidity? Also, given closures and Henderson ramp, would 2027 earnings rise or fall if costs and prices stay the same?
A: Management said the small debt increase gives them flexibility to pursue strategy regardless of market moves and to focus on running the business rather than liquidity. They called the increase conservative, noted a supportive bank group and low net debt to capital, and declined to speculate on 2027, saying they will provide shipment and CapEx guidance later.
"It's a very small increase in debt, and it gives us the ability to continue to execute our strategy almost agnostic to market conditions." — Chris Virostek (CFO)
Arkansas mill closure and B.C. investment
Q (Sean Steuart · TD Cowen): Why close the Arkansas sawmill versus other sites? Also, does the B.C. election change your view on investing in B.C.?
A: They said Leola (central Arkansas) primarily serves west/Texas markets and demand is being reallocated to nearby mills where they invested, so those mills can run higher and lower cost. On B.C., they said they are pleased with modern, integrated assets and a strong workforce, will work with landowners to keep timber available, and see early positive comments from the new government but gave no specific platform comments.
"We are allocating what we see as the available demand to that platform and enabling those mills to run at higher levels, which overall brings our cost down and to service that region." — Sean McLaren (CEO)
mortgage impact and freight availability
Q (Ketan Mamtora · BMO): Are higher mortgage rates reducing activity now? And how are transportation and freight costs and availability trending?
A: They said customers are cautious and there is a 'wait and see' tone, with affordability issues from high mortgage rates weighing on 2027. On freight, they said availability eased in Q3 after a tight Q2, costs remain high but availability improved and is expected to hold into Q4.
"I would say despite costs remaining high, availability has improved in Q3, and usually we expect that to maintain for Q4." — Matt Tobin
indefinite curtailments and Europe demand
Q (Hamir Patel · CIBC): For the indefinite curtailments, will you dismantle sites or could you restart later? And how does demand vary across your European panel business?
A: They said there are no plans to dismantle the curtailed sites now; a restart would need supportive demand, the right fiber supply and residual market conditions, and a clear view on changes needed for the next down cycle. For Europe they said Q3 was affected by annual mill maintenance and hot weather, demand is mixed across countries, and the U.K. shows structural shift to timber frame using more OSB, while their assets are well positioned.
"We've not made any plans to do anything with the sites other than curtail them at this point." — Sean McLaren (CEO)
capital spending and logging capacity
Q (Matthew McKellar · RBC): How will capital spending look if this environment continues? And are contractors parking equipment a temporary issue or a structural risk to supply?
A: They said the major investment projects are winding down and CapEx should come down fairly significantly next year, focusing on maintenance rather than big new strategic projects. On contractors parking equipment, they said this is regional and linked to pulpwood market changes; when contractors can't pass on fuel costs and mills won't buy at high prices, temporary supply disruptions can occur, and the situation tends to normalize when conditions align.
"I would expect that you'll see our CapEx come down fairly significantly next year." — Chris Virostek (CFO)