LOUISIANA-PACIFIC CORPORATION Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported today results for the third quarter of 2015, which included the following:
- Sales for the third quarter of $465 million were lower by 10 percent compared to the year ago quarter.
- Net loss from continuing operations was $25 million ($0.17 per diluted share).
- Non-GAAP adjusted loss from continuing operations was $16 million ($0.12 per diluted share).
- Adjusted EBITDA from continuing operations for the third quarter was $11 million compared to $12 million in the third quarter of 2014.
- Cash and cash equivalents were $448 million as of September 30, 2015.
“All of LP’s operating segments were adjusted EBITDA positive in the third quarter. While our OSB prices averaged 7 percent below the third quarter of last year, we did see a steady rise in Random Lengths pricing, which began in August, and which has continued into this quarter,” said Curt Stevens, chief executive officer. “I’m also pleased to report that we began initial production of siding products from our Swan Valley, Manitoba mill last week, on time and on budget,” he continued.
For the third quarter of 2015, LP reported net loss of $27 million, or $0.19 per diluted share, as compared to a net loss of $20 million, or $0.14 per diluted share for the third quarter of 2014. Reductions in OSB pricing accounted for an $18 million decrease in both operating results and adjusted EBITDA.
YEAR TO DATE RESULTS
For the nine months ended September 30,
2015, LP reported net sales of $1.4 billion compared to $1.5 billion in
the first nine months of 2014. For the first nine months of 2015, LP
reported net loss of $81 million, or $0.57 per diluted share, compared
to loss of $33 million, or $0.23 per diluted share, for the same period
in 2014. Adjusted EBITDA from continuing operations for the first nine
months of 2015 was $33 million compared to $61 million for 2014.
Reductions in OSB pricing accounted for an $81 million decrease in both
operating results and adjusted EBITDA.
ORIENTED STRAND BOARD (OSB) SEGMENT
LP’s OSB segment
manufactures and distributes OSB structural panel products. The OSB
segment reported net sales for the third quarter of 2015 of $200
million, a 14 percent decrease from $233 million of net sales in the
third quarter of 2014. For the third quarter of 2015, the OSB segment
reported an operating loss of $11 million compared to $16 million in the
third quarter of 2014. For the third quarter of 2015, adjusted EBITDA
for this segment increased by $5 million compared to the third quarter
of 2014. For the third quarter of 2015 as compared to third quarter of
2014, sales volumes decreased 9 percent and sales prices decreased by 7
percent. The decrease in selling price unfavorably impacted operating
results and adjusted EBITDA by approximately $16 million for the quarter
as compared to the third quarter of 2014.
SIDING SEGMENT
LP’s Siding segment consists of SmartSide®
siding as well as LP’s prefinished CanExel® siding line. These products
are used in new construction as well as in the repair and remodeling
markets. The Siding segment reported net sales of $158 million in the
third quarter of 2015, a decrease of 3 percent from $163 million in the
year-ago third quarter. For the third quarter of 2015, the Siding
segment reported operating income of $17 million compared to $21 million
in the year-ago quarter. For the third quarter of 2015, the Siding
segment reported $22 million in adjusted EBITDA, a decrease of $3
million compared to the third quarter of 2014.
ENGINEERED WOOD PRODUCTS SEGMENT (EWP)
The EWP segment is
comprised of I-Joist (IJ), Laminated Veneer Lumber and Laminated Strand
Lumber (LVL and LSL). EWP sales in the third quarter of 2015 totaled $74
million, down 4 percent from the year-ago quarter. Operating losses
increased to $1 million for the third quarter of 2015 from breakeven in
the third quarter of 2014. For the third quarter, the EWP segment showed
a decrease of $2 million in adjusted EBITDA as compared to the same
quarter in 2014.
SOUTH AMERICA SEGMENT
The South American segment consists of
facilities in Chile and Brazil. The segment reported sales in the third
quarter of 2015 of $27 million, down 26 percent from $36 million in the
third quarter of 2014. Operating income was $2 million for the third
quarter of 2015 compared to breakeven in the third quarter of 2014. For
the third quarter, LP reported adjusted EBITDA in this segment of $4
million, an increase of $2 million as compared to the third quarter of
2014.
COMPANY OUTLOOK
“With homebuilder confidence at a 10-year
high and OSB prices continuing to increase, I am optimistic that LP’s
results will continue to improve over the next several quarters,”
Stevens concluded. “The longer term housing forecasts consistently show
increased housing starts in each of the next three years as the industry
begins to fill the gap created during the protracted downturn.”
About LP
LP is a premier supplier of building materials,
delivering innovative, high-quality commodity and specialty products to
its retail, wholesale, homebuilding and industrial customers. Visit LP’s
web site at www.lpcorp.com
for additional information on the company as well as reconciliation of
non-GAAP results.
FORWARD LOOKING STATEMENTS
This news
release contains statements concerning Louisiana-Pacific Corporation’s
(LP) future results and performance that are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. The matters addressed in these statements are subject to a number
of risks, uncertainties and assumptions that may cause actual results to
differ materially from those projected, including, but not limited to,
the effect of general economic conditions, including the level of
interest rates and housing starts, market demand for the company’s
products, and prices for structural products; the availability, cost and
other terms of capital; the efficiency and consequences of operations
improvement initiatives and cash conservation measures; the effect of
forestry, land use, environmental and other governmental regulations;
the ability to obtain regulatory approvals; and the risk of losses from
fires, floods and other natural disasters. These and other factors that
could cause or contribute to actual results differing materially from
those contemplated by such forward-looking statements are discussed in
greater detail in the company’s Securities and Exchange Commission
filings.
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||
Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Net sales | $ | 464.9 | $ | 518.1 | $ | 1,429.6 | $ | 1,481.3 | |||||||||||||
| Loss from operations | $ | (17.4 | ) | $ | (14.6 | ) | $ | (64.7 | ) | $ | (28.7 | ) | |||||||||
| Loss from continuing operations before taxes and equity in income of unconsolidated affiliates | $ | (29.0 | ) | $ | (23.3 | ) | $ | (90.4 | ) | $ | (49.5 | ) | |||||||||
| Non-GAAP adjusted loss from continuing operations | $ | (16.2 | ) | $ | (16.3 | ) | (46.9 | ) | $ | (27.6 | ) | ||||||||||
| Loss from continuing operations | $ | (24.6 | ) | $ | (18.3 | ) | (78.6 | ) | $ | (30.4 | ) | ||||||||||
| Net loss | $ | (26.5 | ) | $ | (20.4 | ) | $ | (80.5 | ) | $ | (32.5 | ) | |||||||||
| Net loss per share - basic and diluted | $ | (0.19 | ) | $ | (0.14 | ) | $ | (0.57 | ) | $ | (0.23 | ) | |||||||||
| Average shares of stock outstanding - basic and diluted | 142.6 | 140.8 | 142.3 | 140.9 | |||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||
Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| Net sales | $ | 464.9 | $ | 518.1 | $ | 1,429.6 | $ | 1,481.3 | |||||||||||||
| Operating costs and expenses: | |||||||||||||||||||||
| Cost of sales | 416.2 | 477.0 | 1,287.4 | 1,326.9 | |||||||||||||||||
| Depreciation and amortization | 25.9 | 26.9 | 77.9 | 77.4 | |||||||||||||||||
| Selling and administrative | 38.3 | 31.9 | 114.9 | 108.7 | |||||||||||||||||
| (Gain) loss on sale or impairment of long-lived assets, net | 0.9 | (3.6 | ) | 1.5 | (4.1 | ) | |||||||||||||||
| Other operating charges and credits, net | 1.0 | 0.5 | 12.6 | 1.1 | |||||||||||||||||
| Total operating costs and expenses | 482.3 | 532.7 | 1,494.3 | 1,510.0 | |||||||||||||||||
| Loss from operations | (17.4 | ) | (14.6 | ) | (64.7 | ) | (28.7 | ) | |||||||||||||
| Non-operating income (expense): | |||||||||||||||||||||
| Interest expense, net of capitalized interest | (8.4 | ) | (8.3 | ) | (23.1 | ) | (23.4 | ) | |||||||||||||
| Interest income | 0.5 | 0.9 | 2.9 | 4.4 | |||||||||||||||||
| Other non-operating items | (3.7 | ) | (1.3 | ) | (5.5 | ) | (1.8 | ) | |||||||||||||
| Total non-operating income (expense) | (11.6 | ) | (8.7 | ) | (25.7 | ) | (20.8 | ) | |||||||||||||
| Loss from continuing operations before taxes and equity in income of unconsolidated affiliates | (29.0 | ) | (23.3 | ) | (90.4 | ) | (49.5 | ) | |||||||||||||
| Benefit for income taxes | (2.4 | ) | (3.6 | ) | (7.7 | ) | (15.9 | ) | |||||||||||||
| Equity in income of unconsolidated affiliates | (2.0 | ) | (1.4 | ) | (4.1 | ) | (3.2 | ) | |||||||||||||
| Loss from continuing operations | (24.6 | ) | (18.3 | ) | (78.6 | ) | (30.4 | ) | |||||||||||||
| Loss from discontinued operation before taxes | (2.9 | ) | (3.2 | ) | (2.9 | ) | (3.2 | ) | |||||||||||||
| Benefit for income taxes | (1.0 | ) | (1.1 | ) | (1.0 | ) | (1.1 | ) | |||||||||||||
| Loss from discontinued operations | (1.9 | ) | (2.1 | ) | (1.9 | ) | (2.1 | ) | |||||||||||||
| Net loss | (26.5 | ) | (20.4 | ) | (80.5 | ) | (32.5 | ) | |||||||||||||
| Net loss per share of common stock (basic and diluted): | |||||||||||||||||||||
| Loss per share from continuing operations | $ | (0.17 | ) | $ | (0.13 | ) | (0.55 | ) | (0.22 | ) | |||||||||||
| Loss per share from discontinued operations | (0.02 | ) | (0.01 | ) | (0.02 | ) | (0.01 | ) | |||||||||||||
| Net loss per share | $ | (0.19 | ) | $ | (0.14 | ) | (0.57 | ) | (0.23 | ) | |||||||||||
| Average shares of stock outstanding - basic and diluted | 142.6 | 140.8 | 142.3 | 140.9 | |||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||
| September 30, 2015 | December 31, 2014 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 447.7 | $ | 532.7 | |||||||
| Receivables | 120.0 | 108.4 | |||||||||
| Inventories | 230.5 | 229.8 | |||||||||
| Prepaid expenses and other current assets | 8.9 | 25.0 | |||||||||
| Deferred income taxes | 24.4 | 45.1 | |||||||||
| Assets held for sale | 9.3 | 9.3 | |||||||||
| Total current assets | 840.8 | 950.3 | |||||||||
| Timber and timberlands | 53.2 | 67.1 | |||||||||
| Property, plant and equipment, at cost | 2,346.6 | 2,315.1 | |||||||||
| Accumulated depreciation | (1,518.2 | ) | (1,464.4 | ) | |||||||
| Net property, plant and equipment | 828.4 | 850.7 | |||||||||
| Goodwill | 9.7 | 9.7 | |||||||||
| Notes receivable from asset sales | 432.2 | 432.2 | |||||||||
| Investments in and advances to affiliates | 7.4 | 5.0 | |||||||||
| Restricted cash | 15.8 | 10.4 | |||||||||
| Other assets | 21.4 | 22.8 | |||||||||
| Long-term deferred tax asset | 0.6 | 0.6 | |||||||||
| Total assets | $ | 2,209.5 | $ | 2,348.8 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current portion of long-term debt | $ | 2.2 | $ | 2.4 | |||||||
| Accounts payable and accrued liabilities | 162.5 | 168.3 | |||||||||
| Current portion of contingency reserves | 2.0 | 2.0 | |||||||||
| Total current liabilities | 166.7 | 172.7 | |||||||||
| Long-term debt, excluding current portion | 751.7 | 754.8 | |||||||||
| Deferred income taxes | 115.3 | 139.5 | |||||||||
| Contingency reserves, excluding current portion | 11.6 | 12.2 | |||||||||
| Other long-term liabilities | 141.1 | 153.8 | |||||||||
| Stockholders’ equity: | |||||||||||
| Common stock | 153.0 | 152.8 | |||||||||
| Additional paid-in capital | 497.4 | 507.0 | |||||||||
| Retained earnings | 731.8 | 812.3 | |||||||||
| Treasury stock | (212.8 | ) | (225.0 | ) | |||||||
| Accumulated comprehensive loss | (146.3 | ) | (131.3 | ) | |||||||
| Total stockholders’ equity | 1,023.1 | 1,115.8 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,209.5 | $ | 2,348.8 | |||||||
CONDENSED CONSOLIDATED CASH FLOW STATEMENT | |||||||||||||||||||||
Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||
| Net loss | $ | (26.5 | ) | $ | (20.4 | ) | $ | (80.5 | ) | $ | (32.5 | ) | |||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||||||||||||
| Depreciation and amortization | 25.9 | 26.9 | 77.9 | 77.4 | |||||||||||||||||
| Income from unconsolidated affiliates | (2.0 | ) | (1.4 | ) | (4.1 | ) | (3.2 | ) | |||||||||||||
| (Gain) loss on sale or impairment of long-lived assets, net | 0.9 | (3.6 | ) | 1.5 | (4.1 | ) | |||||||||||||||
| Other operating charges and credits, net | 1.0 | 0.5 | 12.6 | 1.1 | |||||||||||||||||
| Stock-based compensation related to stock plans | 2.2 | 2.4 | 7.3 | 6.9 | |||||||||||||||||
| Exchange loss on remeasurement | 1.2 | (2.4 | ) | 5.5 | (1.1 | ) | |||||||||||||||
| Increase in contingencies, net of cash payments | (1.0 | ) | (1.2 | ) | (0.5 | ) | (1.2 | ) | |||||||||||||
| Cash settlements of warranties, net of accruals | (0.3 | ) | 0.1 | (5.7 | ) | (4.9 | ) | ||||||||||||||
| Pension expense, net of contributions | 1.1 | (5.1 | ) | 5.5 | (3.8 | ) | |||||||||||||||
| Non-cash interest expense, net | 0.8 | 0.7 | 0.7 | 1.3 | |||||||||||||||||
| Other adjustments, net | 0.5 | — | 1.3 | 0.4 | |||||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||||||
| (Increase) decrease in receivables | 0.6 | (0.2 | ) | (16.0 | ) | (67.4 | ) | ||||||||||||||
| (Increase) decrease in inventories | (8.5 | ) | 15.6 | (5.4 | ) | 4.3 | |||||||||||||||
| Increase in prepaid expenses and other current assets | (1.8 | ) | (2.5 | ) | (1.0 | ) | (1.8 | ) | |||||||||||||
| Decrease in accounts payable and accrued liabilities | 14.6 | 24.1 | 10.4 | 18.1 | |||||||||||||||||
| Decrease in deferred income taxes | (7.5 | ) | (6.0 | ) | (10.8 | ) | (19.8 | ) | |||||||||||||
| Net cash provided by (used in) operating activities | 1.2 | 27.5 | (1.3 | ) | (30.3 | ) | |||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||||
| Property, plant and equipment additions | (33.6 | ) | (12.6 | ) | (67.1 | ) | (54.8 | ) | |||||||||||||
| Investments in and refunds from joint ventures | 1.7 | — | 1.7 | — | |||||||||||||||||
| Proceeds from sales of assets | — | 12.0 | 0.4 | 12.8 | |||||||||||||||||
| (Increase) decrease in restricted cash under letters of credit/credit facility | (0.5 | ) | (0.1 | ) | (5.9 | ) | 0.9 | ||||||||||||||
| Other financing activities | 0.1 | — | 0.1 | — | |||||||||||||||||
| Net cash used in investing activities | (32.3 | ) | (0.7 | ) | (70.8 | ) | (41.1 | ) | |||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||||
| Repayment of long-term debt | (0.8 | ) | (1.1 | ) | (2.2 | ) | (2.2 | ) | |||||||||||||
| Sale of common stock under equity plans | — | — | 0.4 | — | |||||||||||||||||
| Taxes paid related to net share settlement of equity awards | (0.1 | ) | — | (5.4 | ) | (1.5 | ) | ||||||||||||||
| Net cash used in financing activities | (0.9 | ) | (1.1 | ) | (7.2 | ) | (3.7 | ) | |||||||||||||
| EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | (1.3 | ) | (0.5 | ) | (5.7 | ) | (1.8 | ) | |||||||||||||
| Net increase (decrease) in cash and cash equivalents | (33.3 | ) | 25.2 | (85.0 | ) | (76.9 | ) | ||||||||||||||
| Cash and cash equivalents at beginning of period | 481.0 | 554.7 | 532.7 | 656.8 | |||||||||||||||||
| Cash and cash equivalents at end of period | $ | 447.7 | $ | 579.9 | $ | 447.7 | $ | 579.9 | |||||||||||||
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||
Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
| Dollar amounts in millions | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
| Net sales: | |||||||||||||||||||||
| OSB | $ | 200.0 | $ | 233.4 | $ | 601.2 | $ | 652.0 | |||||||||||||
| Siding | 157.8 | 163.2 | 495.2 | 476.4 | |||||||||||||||||
| EWP | 74.4 | 77.3 | 211.2 | 215.4 | |||||||||||||||||
| South America | 26.8 | 36.0 | 101.4 | 114.5 | |||||||||||||||||
| Other | 6.8 | 8.3 | 21.5 | 24.9 | |||||||||||||||||
| Intersegment Sales | (0.9 | ) | (0.1 | ) | (0.9 | ) | (1.9 | ) | |||||||||||||
| $ | 464.9 | $ | 518.1 | $ | 1,429.6 | $ | 1,481.3 | ||||||||||||||
| Operating profit (loss): | |||||||||||||||||||||
| OSB | $ | (11.1 | ) | $ | (16.4 | ) | $ | (57.6 | ) | $ | (23.8 | ) | |||||||||
| Siding | 17.2 | 20.8 | 79.3 | 65.9 | |||||||||||||||||
| EWP | (0.9 | ) | (0.1 | ) | (7.3 | ) | (8.5 | ) | |||||||||||||
| South America | 2.4 | 0.3 | 6.8 | 8.5 | |||||||||||||||||
| Other | (0.6 | ) | (2.4 | ) | (2.5 | ) | (4.1 | ) | |||||||||||||
| Other operating charges and credits, net | (1.0 | ) | (0.5 | ) | (12.6 | ) | (1.1 | ) | |||||||||||||
| Gain (loss) on sale or impairment of long-lived assets | (0.9 | ) | 3.6 | (1.5 | ) | 4.1 | |||||||||||||||
| General corporate and other expenses, net | (20.5 | ) | (18.5 | ) | (65.2 | ) | (66.5 | ) | |||||||||||||
| Other non-operating income (expense) | (3.7 | ) | (1.3 | ) | (5.5 | ) | (1.8 | ) | |||||||||||||
| Interest income | 0.5 | 0.9 | 2.9 | 4.4 | |||||||||||||||||
| Interest expense, net of capitalized interest | (8.4 | ) | (8.3 | ) | (23.1 | ) | (23.4 | ) | |||||||||||||
| Loss from operations before taxes | (27.0 | ) | (21.9 | ) | (86.3 | ) | (46.3 | ) | |||||||||||||
| Benefit for income taxes | (2.4 | ) | (3.6 | ) | (7.7 | ) | (15.9 | ) | |||||||||||||
| Loss from continuing operations | $ | (24.6 | ) | $ | (18.3 | ) | $ | (78.6 | ) | $ | (30.4 | ) | |||||||||
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES | |||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||
| Oriented strand board, million square feet 3/8" basis(1) | 1,050 | 1,141 | 3,143 | 3,172 | |||||||||
| Oriented strand board, million square feet 3/8" basis (produced by North America non-OSB segment mills) | 64 | 10 | 80 | 71 | |||||||||
| Wood-based siding, million square feet 3/8" basis | 258 | 295 | 888 | 835 | |||||||||
| Engineered I-Joist, million lineal feet(1) | 21 | 19 | 57 | 60 | |||||||||
| Laminated veneer lumber (LVL), thousand cubic feet(1) and laminated strand lumber (LSL), thousand cubic feet | 2,343 | 2,340 | 6,828 | 6,886 | |||||||||
(1) Includes volumes produced by joint venture operations or under sales arrangements and sold to LP. | |||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151103005334/en/
