LP Reports Second Quarter 2010 Results
Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported today results for the second quarter of 2010, which included the following:
- Total sales for the second quarter of $447 million were up 67 percent versus a year ago, led by higher OSB prices while U.S. housing starts increased 12 percent from second quarter 2009 levels.
- Income from continuing operations of $24 million, or $0.17 per diluted share.
- Adjusted EBITDA from continuing operations for the second quarter was $75 million compared to a $11 million loss in the second quarter of 2009.
“Our results for this quarter reflect the higher OSB pricing and increased volume of shipments in all product lines compared to the same quarter last year,” said Rick Frost, Chief Executive Officer. “Unfortunately, demand began to taper significantly in the second half of May and this weakness continued into June. Jobs, consumer confidence, inventory of vacant homes for sale and the overall state of the economy have had a downward pull on housing.”
SECOND QUARTER RESULTS
For the quarter ended June 30, 2010, LP reported net sales of $447 million, an increase from $267 million in the second quarter of 2009. For the second quarter, the company reported operating income of $49 million as compared to a loss in the second quarter of 2009 of $32 million.
For the second quarter of 2010, LP reported income from continuing operations of $24 million, or $0.17 per diluted share, as compared to a loss from continuing operations of $27 million, or $0.26 per diluted share for the second quarter of 2009.
YEAR-TO-DATE RESULTS
For the six months ended June 30, 2010, LP reported net sales of $744 million, an increase from $473 million in the first six months of 2009. For the first six months of 2010, the company reported operating income of $26 million as compared to a loss in the comparable period of 2009 of $75 million. Adjusted EBITDA from continuing operations for the first six months of 2010 was $78 million compared to a $36 million loss in the first six months of 2009.
For the first six months of 2010, LP reported income from continuing operations of $1 million, or $0.01 per diluted share, as compared to a loss $58 million, or $0.55 per diluted share, for the first six months of 2009.
ORIENTED STRAND BOARD (OSB) SEGMENT
LP’s OSB segment manufactures and distributes OSB structural panel products. LP is currently operating eight facilities and has indefinitely curtailed two other facilities due to market conditions. The OSB segment reported net sales for the second quarter of 2010 of $217 million, up 122 percent compared with $98 million of net sales in the second quarter of 2009. For the second quarter of 2010, the OSB segment reported operating income of $48 million – an improvement of $66 million – compared with an operating loss of $18 million in the second quarter of 2009. For the second quarter, LP realized an improvement of $67 million in adjusted EBITDA from continuing operations for this segment as compared to the second quarter of 2009. For the second quarter of 2010 as compared to the second quarter of 2009, sales volumes were up 24 percent with sales price increasing by 78 percent. The increase in sales price accounted for approximately a $72 million dollar increase in both operating results and adjusted EBITDA from continuing operations. Offsetting the improvement in operating results was the increase in our Canadian dollar denominated manufacturing costs due to the strengthening of the Canadian dollar and certain raw materials.
SIDING SEGMENT
LP’s Siding segment consists of LP SmartSide® trim and siding as well as LP CanExel® prefinished siding lines. These products are used in new construction as well as in the repair and remodeling markets. The Siding segment reported net sales of $130 million in the second quarter of 2010, an increase of 25 percent from $104 million in the year-ago second quarter. For the second quarter of 2010, the Siding segment reported an operating income of $22 million compared to $7 million in the year-ago quarter. For the second quarter, LP reported $27 million in adjusted EBITDA from continuing operations, an increase of $16 million as compared to the second quarter of 2009.
In the second quarter of 2010, sales increased across all regions due to improved retail sales and housing starts. Additionally, one of the siding mills in this segment also produces commodity OSB and this segment also benefited from the improved OSB price.
ENGINEERED WOOD PRODUCTS SEGMENT (EWP)
The EWP segment is comprised of I-Joist (IJ), Laminated Veneer Lumber and Laminated Strand Lumber (LVL and LSL). These products are principally used in new construction. EWP segment sales in the second quarter of 2010 totaled $56 million, an increase of 55 percent from $36 million in the year-ago quarter. Operating losses decreased by half to $4 million for the second quarter of 2010 from $9 million for the second quarter of 2009. For the second quarter, LP realized an increase in adjusted EBITDA from continuing operations of $5 million for this segment as compared to the second quarter of 2009.
The improved operating results in the second quarter were driven by higher volumes and increased prices which were offset by higher raw material costs.
COMPANY OUTLOOK
"The U.S. economy remains in an unsettled state that requires companies to be extremely agile to respond to wide swings in demand,” Frost continued. “For housing, there is growing agreement that the timing and strength of the recovery will be determined by the size of the inventory of excess vacant homes and household formations enabled by job recovery. I believe we’ll see an erratic path for the rest of 2010 and into next year,” Frost concluded.
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.
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LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES FINANCIAL AND QUARTERLY DATA (Dollar amounts in millions, except per share amounts) (Unaudited) |
|||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||
| Net sales | $ | 447.1 | $ | 267.4 | $ | 743.7 | $ | 472.9 | |||||||
| Income (loss) from operations | $ | 48.9 | $ | (32.2 | ) | $ | 26.2 | $ | (74.7 | ) | |||||
| Income (loss) before income taxes and equity in loss of | |||||||||||||||
| unconsolidated affiliates | $ | 35.4 | $ | (39.9 | ) | $ | 3.3 | $ | (86.9 | ) | |||||
|
Income (loss) from continuing operations excluding (gain) loss on sale or impairment of long-lived assets, other operating credits and charges, net, gain on early debt extinguishment and other than temporary investment impairment |
$ | 23.9 | $ | (28.5 | ) | $ | 2.1 | $ | (60.9 | ) | |||||
| Income (loss) from continuing operations | $ | 23.6 | $ | (27.2 | ) | $ | 1.1 | $ | (57.5 | ) | |||||
| Net income (loss) attributable to LP | $ | 22.3 | $ | (29.2 | ) | $ | (0.2 | ) | $ | (59.7 | ) | ||||
| Net income (loss) per share - basic | $ | 0.17 | $ | (0.28 | ) | $ | - | $ | (0.58 | ) | |||||
|
- diluted |
$ | 0.16 | $ | (0.28 | ) | $ | - | $ | (0.58 | ) | |||||
| Average shares outstanding (in millions) | |||||||||||||||
| Basic | 128.5 | 103.0 | 127.2 |
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