Building Materials Manufacturer Louisiana-Pacific's Q4 Topline Hit By Lower Volumes: Details

Louisiana-Pacific Corp LPX reported a fourth-quarter fiscal 2023 net sales decline of 6.7% year-over-year to $658 million, beating the consensus of $619.97 million.

Siding net sales decreased by 14% Y/Y to $332 million due to 15% lower volumes partially offset by 1% higher prices. Oriented Strand Board (OSB) net sales increased by 6% to $272 million.

Adjusted EPS was $0.71, up from $0.61 YoY, beating the consensus of $0.55.

Adjusted EBITDA was $129 million, an increase of 29% Y/Y, and the margin expanded by 542 bps to 19.6%.

Gross margin expanded by 600 bps to 24.2%, with gross profit up 24.2% Y/Y to $159 million. Operating margin expanded by 516 bps to 13.5%.

Net cash provided by operating activities for the fiscal totaled $316 million compared to $1.14 billion a year ago.

Cash and cash equivalents totaled $222 million at the end of the quarter, and borrowing availability under the revolving credit facility was $550 million, resulting in total liquidity of ~$770 million for the company.

“Siding inventory and sell-through patterns remain seasonally normal. As we look forward to 2024 and beyond, LP’s recent investments in mill and prefinishing capacity leave us well positioned for expansion and share gains in Siding and Structural Solutions,” commented LP Chairperson and Chief Executive Officer Brad Southern.

1Q 2024 Outlook: LPX expects Siding Net sales growth of 3%-5% YoY, and consolidated Adjusted EBITDA Of $130 million-$145 million.

2024 Outlook: The company expects Siding net sales to grow by 8%-10% YoY and sees consolidated Adjusted EBITDA of $495 million to $525 million and Capital Expenditures of $200 million to $220 million.

Price Action: LPX shares traded higher by 1.9% at $69.96 on the last check Wednesday.