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LP Reports Third Quarter 2010 Results

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NASHVILLE, Tenn.--(BUSINESS WIRE)--

Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported today results for the third quarter of 2010, which included the following:

  • Total sales for the third quarter of $323 million were up 4 percent versus a year ago.
  • Loss from continuing operations of $31 million, or $0.23 per diluted share.
  • Adjusted loss (non-GAAP) from continuing operations of $12 million, or $0.09 per diluted share
  • Adjusted EBITDA from continuing operations for the third quarter was $4 million compared to $11 million in the third quarter of 2009.

“In the third quarter, we saw a transition to a housing market without tax credits,” said Rick Frost, Chief Executive Officer. “The channel adjusted inventories downward with very slow building activity in July and August. Activity did increase slightly in September.”

THIRD QUARTER RESULTS

For the quarter ended September 30, 2010, LP reported net sales of $323 million, an increase from $311 million in the third quarter of 2009. For the third quarter, the company reported an operating loss of $16 million as compared to a loss in the third quarter of 2009 of $8 million.

For the third quarter of 2010, LP reported a loss from continuing operations of $31 million, or $0.23 per diluted share, as compared to a loss from continuing operations of $13 million, or $0.12 per diluted share for the third quarter of 2009.

YEAR TO DATE RESULTS

For the nine months ended September 30, 2010, LP reported net sales of $1.1 billion, an increase from $783 million in the first nine months of 2009. For the first nine months of 2010, the company reported an operating income of $10 million as compared to a loss in the comparable period of 2009 of $83 million. Adjusted EBITDA from continuing operations for the first nine months of 2010 was $81 million compared to a $25 million loss in the first nine months of 2009.

For the first nine months of 2010, LP reported loss from continuing operations of $30 million, or $0.23 per diluted share, as compared to a loss of $70 million, or $0.67 per diluted share, for the first nine 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 third quarter of 2010 of $140 million, up 14 percent compared with $123 million of net sales in the third quarter of 2009. For the third quarter of 2010, the OSB segment reported an operating loss of $5 million compared with an operating loss of $6 million in the third quarter of 2009. For the third quarter, adjusted EBITDA from continuing operations for this segment was comparable to the third quarter of 2009. For the third quarter of 2010 as compared to the third quarter of 2009, sales volumes were up 4 percent and sales price increased by 9 percent. The increase in sales price accounted for approximately a $10 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 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 $104 million in the third quarter of 2010, a decrease of 8 percent from $113 million in the year-ago third quarter. For the third quarter of 2010, the Siding segment reported operating income of $9 million compared to $16 million in the year-ago quarter. For the third quarter, LP reported $13 million in adjusted EBITDA from continuing operations, a decrease of $8 million as compared to the third quarter of 2009.

In the third quarter of 2010, sales declined across all regions due to customers balancing inventory with slower demand. Volumes were lower while sales prices rose slightly.

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 third quarter of 2010 totaled $38 million, a decrease of 21 percent from $48 million in the year-ago quarter. Operating losses decreased to $5 million for the third quarter of 2010 from $6 million for the third quarter of 2009. For the third quarter, adjusted EBITDA from continuing operations improved slightly as compared to the third quarter of 2009.

Although volumes were significantly lower compared to the same quarter last year, operating results improved slightly due primarily to higher sales prices which were offset in part by higher raw material costs.

COMPANY OUTLOOK

"Our outlook for the short term has not changed much from last quarter. We continue to believe the recovery in housing construction will be erratic,” Frost continued. “The timing and strength of the upturn will be determined by the speed with which vacant homes for sale are sold and household formations occur enabled by job recovery,” 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 a 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

FINANCIAL AND QUARTERLY DATA

(Dollar amounts in millions, except per share amounts) (Unaudited)

       
Quarter Ended Nine Months Ended
September 30, September 30,
  2010     2009     2010       2009  
 
Net sales $ 322.5 $ 310.5 $ 1,066.2 $ 783.4
 
Income (loss) from operations $ (15.9 ) $ (8.1 ) $ 10.3 $ (82.8 )
 

Income (loss) before income taxes and equity in loss of unconsolidated affiliates

$ (43.6 ) $ (20.4 ) $ (40.3 ) $ (107.3 )

Income (loss) from continuing operations excluding (gain) loss on sale or impairment of long-lived assets, other operating credits and charges, net, (gain) loss on early debt extinguishment and other other than temporary investment impairment

$ (12.2 ) $ (14.0 ) $ (10.1 ) $ (74.9 )
 
Income (loss) from continuing operations $ (30.9 ) $ (12.5 ) $ (29.8 ) $ (70.0 )
 
Net income (loss) attributable to LP $ (32.0 ) $ (12.3 ) $ (32.2 ) $ (72.1 )
 
Net income (loss) per share - basic $ (0.24 ) $ (0.12 ) $ (0.25 ) $ (0.70 )

               - diluted

$ (0.24 ) $ (0.12 ) $ (0.25 ) $ (0.70 )
 
Average shares outstanding (in millions)
Basic 131.1 103.4 128.5 103.2
Diluted 131.1 103.4 128.5 103.2

Calculation of income (loss) from continuing operations excluding (gain) loss on sale or impairment of long-lived assets and other operating credits and charges, net, (gain) loss on early debt extinguishment and other than temporary investment impairment:

         
Income (loss) from continuing operations $ (30.9 ) $ (12.5 ) $ (29.8 ) $ (70.0 )
 
Other than temporary investment impairment 16.9 0.1 16.9 1.8
(Gain) loss on early extinguishment of debt - 0.2 - (0.4 )
(Gain) loss on sale or impairment of long-lived assets 0.9 (1.2 ) 2.1 (2.1 )
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