Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported results
today for the third quarter of 2017, which included the
following:
- Sales for the third quarter of $718
million were higher by 20 percent compared to the year ago
quarter.
- Income from continuing operations was
$111 million ($0.76 per diluted share) compared to $66 million
($0.45 per diluted share) in the third quarter of 2016.
- Non-GAAP adjusted income from
continuing operations was $102 million ($0.70 per diluted
share).
- Adjusted EBITDA from continuing
operations for the third quarter was $192 million compared to $111
million in the third quarter of 2016.
“We had our strongest third quarter performance in 12 years,”
said Brad Southern, Chief Executive Officer. “The key drivers to
our earnings improvement for the quarter were OSB and siding
pricing, as well as LP product mix and an increase in volume.”
THIRD QUARTER RESULTS
For the third quarter of 2017, LP reported net sales of $718
million, up from $596 million in the same quarter of 2016. LP
reported income from continuing operations of $111 million, or
$0.76 per diluted share, as compared to $66 million, or $0.45 per
diluted share for the third quarter of 2016. Adjusted EBITDA from
continuing operations for the third quarter of 2017 was $192
million compared to $111 million in the third quarter of 2016.
YEAR TO DATE RESULTS
For the nine months ended September 30, 2017, LP reported net
sales of $2.0 billion compared to $1.7 billion in the first nine
months of 2016. For the first nine months of 2017, LP reported
income from continuing operations of $260 million, or $1.78 per
diluted share, compared to $108 million, or $0.74 per diluted
share, for the same period in 2016. Adjusted EBITDA from continuing
operations for the first nine months of 2017 was $468 million
compared to $262 million for 2016.
SIDING SEGMENT
LP’s Siding segment consists of SmartSide® siding as well as
LP’s prefinished CanExel® siding line and a minor amount of OSB.
These products are used in new construction, repair and remodeling
and non-residential markets. The Siding segment reported net sales
of $226 million in the third quarter of 2017, an increase of $31
million from $195 million in the year-ago third quarter. For the
third quarter of 2017, the Siding segment reported operating income
of $53 million compared to $35 million in the year-ago quarter. The
Siding segment reported $61 million in Adjusted EBITDA from
continuing operations, an increase of $19 million compared to the
third quarter of 2016. The increase in OSB sales prices sold in
this segment accounted for approximately $4 million of the increase
in both operating results and Adjusted EBITDA from continuing
operations.
For the first nine months, Siding reported sales of $671
million, up 15 percent from the prior year and had an operating
income of $142 million compared to $104 million in 2016. Adjusted
EBITDA from continuing operations for the first nine months of 2017
was $166 million compared to $125 million in 2016. The increase in
OSB sales prices sold in this segment accounted for approximately
$11.0 million of the increase in both operating results and
Adjusted EBITDA from continuing operations.
ORIENTED STRAND BOARD (OSB) SEGMENT
LP’s OSB segment manufactures and distributes OSB structural
panel products. The OSB segment reported net sales of $351 million,
a $69 million increase from $282 million of net sales in the third
quarter of 2016. For the third quarter of 2017, the OSB segment
reported operating income of $126 million compared to $67 million
in the third quarter of 2016. The OSB segment’s Adjusted EBITDA
from continuing operations increased by $59 million compared to the
third quarter of 2016. For the third quarter of 2017, sales volumes
were down slightly with the same quarter of 2016 and sales prices
increased by 29 percent. The increase in selling price favorably
impacted operating results and Adjusted EBITDA from continuing
operations by approximately $79 million for the quarter as compared
to the third quarter of 2016.
For the first nine months, OSB reported sales of $944 million,
up 26 percent from the prior year and had an operating income of
$289 million compared to $127 million in 2016. Adjusted EBITDA from
continuing operations for the first nine months of 2017 was $335
million compared to $172 million in 2016. For the first nine
months, sales volumes were flat and sales prices increased 27
percent. The increase in selling price favorably impacted results
and Adjusted EBITDA from continuing operations by approximately
$200 million for the first nine months as compared to 2016.
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 reported net
sales of $98 million in the third quarter of 2017, up 22 percent
from the year-ago quarter. Operating income increased to $6 million
for the third quarter of 2017 compared to a break even in the third
quarter of 2016. For the third quarter, the EWP segment showed an
increase of $6 million in Adjusted EBITDA from continuing
operations as compared to the same quarter in 2016.
For the first nine months, EWP reported sales of $274 million,
up 19 percent from the prior year and had an operating income of
$12 million compared to an operating loss of $2 million in 2016.
Adjusted EBITDA from continuing operations for the first nine
months of 2017 was $24 million compared to $9 million in 2016.
SOUTH AMERICA SEGMENT
The South American segment consists of facilities in Chile and
Brazil. The segment reported net sales in the third quarter of 2017
of $38 million, up $6 million from $32 million in the third quarter
of 2016. Operating income increased from $3 million to $6 million
for the third quarter of 2017 compared to the third quarter of
2016. Adjusted EBITDA from continuing operations for the third
quarter of 2017 was $8 million compared to $6 million in 2016.
For the first nine months, South America reported sales of $115
million, up 11 percent from the prior year and had an operating
income of $16 million compared to $15 million in 2016. Adjusted
EBITDA from continuing operations for the first nine months of 2017
was $23 million compared to $22 million in 2016.
COMPANY OUTLOOK
“We continue to be optimistic about the housing recovery and
believe the upward trend in single family starts will continue,”
Southern said. “As we move forward, we remain committed to and
focused on growing our specialty products and improving operating
margins in our commodity businesses.”
Louisiana-Pacific Corporation is a leading manufacturer of
quality engineered wood building materials including OSB,
structural framing products, and exterior siding for use in
residential, industrial and light commercial construction. From
manufacturing facilities in the U.S., Canada, Chile and Brazil, LP
products are sold to builders and homeowners through building
materials distributors and dealers and retail home centers. Founded
in 1973, LP is headquartered in Nashville, Tennessee and traded on
the New York Stock Exchange under LPX. 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.
CONSOLIDATED STATEMENTS OF INCOME LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES (Dollar amounts in millions, except
per share amounts) (Unaudited) Quarter Ended Nine Months
Ended September 30, September 30, 2017 2016 2017 2016
Net sales $ 718.3 $ 596.4 $ 2,023.3 $ 1,683.4
Operating costs and expenses: Cost of sales 479.3 442.6
1,420.1 1,301.2 Depreciation and amortization 31.1 29.6 91.3 86.0
Selling and administrative 49.2 47.0 144.8 135.8 (Gain) Loss on
sale or impairment of long-lived assets, net 0.7 0.3 (1.8 ) 1.0
Other operating credits and charges, net (0.9 ) — 4.5
11.4 Total operating costs and expenses 559.4 519.5
1,658.9 1,535.4 Income from operations 158.9
76.9 364.4 148.0 Non-operating
income (expense): Interest expense, net of capitalized interest
(4.9 ) (9.0 ) (14.8 ) (26.3 ) Investment income 2.9 2.5 7.2 6.4
Loss on early debt extinguishment — (13.2 ) — (13.2 ) Other
non-operating items (0.6 ) (0.5 ) (2.4 ) 1.4 Total
non-operating income (expense) (2.6 ) (20.2 ) (10.0 ) (31.7 )
Income from continuing operations before taxes and equity in
income of unconsolidated affiliates 156.3 56.7 354.4 116.3
Provision for income taxes 46.4 (7.5 ) 97.9 13.1 Equity in income
of unconsolidated affiliates (1.0 ) (1.4 ) (3.8 ) (4.4 ) Income
from continuing operations 110.9 65.6 260.3
107.6 Loss from discontinued operation before taxes
(1.7 ) — (1.7 ) — Benefit for income taxes (0.6 ) — (0.6 ) —
Loss from discontinued operations (1.1 ) — (1.1 ) —
Net income $ 109.8 $ 65.6 $ 259.2
$ 107.6 Basic net income per share of common
stock: Income from continuing operations $ 0.77 $ 0.46 $ 1.80 $
0.75 Loss from discontinued operations (0.01 ) — (0.01 ) —
Net income per share $ 0.76 $ 0.46 $ 1.79
$ 0.75 Diluted net income per share of common stock:
Income from continuing operations $ 0.76 $ 0.45 $ 1.78 $ 0.74 Loss
from discontinued operations (0.01 ) — (0.01 ) — Net
income per share $ 0.75 $ 0.45 $ 1.77 $ 0.74
Weighted average shares of stock outstanding - basic
144.5 143.7 144.4 143.3 Weighted
average shares of stock outstanding - diluted 146.5 145.4
146.3 145.2 CONSOLIDATED
BALANCE SHEETS LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions) (Unaudited) September 30, 2017
December 31, 2016 ASSETS Cash and cash equivalents $ 848.7 $ 659.3
Receivables, net of allowance for doubtful accounts of $1.0 million
at September 30, 2017 and December 31, 2016 171.4 108.3 Inventories
231.0 234.6 Prepaid expenses and other current assets 8.8 6.1
Current portion of notes receivable from asset sales 22.2 — Assets
held for sale 8.7 8.2 Total current assets 1,290.8
1,016.5 Timber and timberlands 55.6 53.5
Property, plant and equipment 2,472.3 2,410.8 Accumulated
depreciation (1,599.6 ) (1,527.6 ) Property, plant and equipment,
net 872.7 883.2 Goodwill 9.7 9.7 Notes receivable
from asset sales — 22.2 Investments in and advances to affiliates
7.4 6.2 Restricted cash 13.2 13.2 Other assets 57.2 22.4 Long-term
deferred tax asset 1.4 4.3 Total assets $ 2,308.0
$ 2,031.2 LIABILITIES AND EQUITY Current portion of
long-term debt $ 0.5 $ 2.6 Current portion of limited recourse
notes payable 22.0 — Accounts payable and accrued liabilities 212.5
191.5 Income taxes payable 7.4 31.3 Current portion of contingency
reserves 3.4 3.4 Total current liabilities 245.8
228.8 Long-term debt, excluding current portion 353.0
374.4 Deferred income taxes 51.3 27.7 Contingency reserves,
excluding current portion 12.3 12.7 Other long-term liabilities
180.3 191.9 Stockholders’ equity: Common stock 153.4 153.4
Additional paid-in capital 470.0 478.2 Retained earnings 1,149.5
890.3 Treasury stock (178.2 ) (189.0 ) Accumulated comprehensive
loss (129.4 ) (137.2 ) Total stockholders’ equity 1,465.3
1,195.7 Total liabilities and stockholders’ equity $ 2,308.0
$ 2,031.2 CONSOLIDATED CASH FLOW
STATEMENT LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (Dollar
amounts in millions) (Unaudited) Quarter Ended Nine Months
Ended September 30, September 30, 2017 2016 2017
2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $
109.8 $ 65.6 $ 259.2 $ 107.6 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 31.1 29.6 91.3 86.0 Equity in income of unconsolidated
affiliates, including dividends (0.2 ) — (1.2 ) 0.3 (Gain) loss on
sale or impairment of long-lived assets, net 0.7 0.3 (1.8 ) 1.0
Loss on early debt extinguishment — 13.2 — 13.2 Other operating
credits and charges, net (0.9 ) — 4.5 11.4 Stock-based compensation
related to stock plans 2.0 3.2 8.0 9.4 Exchange (gain) loss on
remeasurement (0.1 ) (0.2 ) 1.6 (0.9 ) Cash settlements of
warranties, net of accruals 0.1 (4.6 ) (5.5 ) (11.4 ) Pension
expense, net of contributions (3.2 ) — (3.9 ) 1.4 Non-cash interest
expense, net 0.1 1.4 0.3 1.6 Other adjustments, net (0.2 ) (0.6 )
(0.4 ) (1.3 ) Changes in assets and liabilities: (Increase)
decrease in receivables (17.1 ) 14.1 (61.9 ) (37.0 ) (Increase)
decrease in inventories (8.5 ) 4.8 4.5 (3.2 ) (Increase) decrease
in prepaid expenses 0.6 0.7 (2.7 ) (1.9 ) Increase in accounts
payable and accrued liabilities 18.1 17.8 12.8 59.5 Increase
(decrease) in income taxes 11.1 (9.2 ) 0.2 4.6
Net cash provided by operating activities 143.4 136.1
305.0 240.3 CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment additions (35.0 ) (27.6 ) (80.7 )
(78.7 ) Proceeds from sales of assets 0.1 — 3.3 — (Increase)
decrease in restricted cash under letters of credit — 0.2 — (0.1 )
Increase in restricted cash for redemption of long-term debt —
(93.4 ) — (93.4 ) Payment of long-term deposit — — (32.0 ) — Other
financing activities 0.1 (0.1 ) 0.1 (0.2 ) Net cash
used in investing activities (34.8 ) (120.9 ) (109.3 ) (172.4 )
CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings of long-term debt
— 350.0 — 350.0 Repayment of long-term debt (1.2 ) (274.8 ) (2.5 )
(282.7 ) Payment of debt issuance fees — (5.0 ) — (5.0 ) Sale of
common stock, net of cash payments under equity plans — — (0.4 )
(0.1 ) Taxes paid related to net share settlement of equity awards
(0.5 ) (0.8 ) (5.3 ) (8.9 ) Net cash provided by (used in)
financing activities (1.7 ) 69.4 (8.2 ) 53.3 EFFECT
OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS 1.8 0.3
1.9 3.8 Net increase in cash and cash equivalents
108.7 84.9 189.4 125.0 Cash and cash equivalents at beginning of
period 740.0 474.8 659.3 434.7 Cash and
cash equivalents at end of period $ 848.7 $ 559.7 $
848.7 $ 559.7 LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES SELECTED SEGMENT INFORMATION (Dollar
amounts in millions) (Unaudited) Quarter Ended Nine Months
Ended September 30, September 30, Dollar amounts in millions 2017
2016 2017 2016 Net sales: Siding $ 226.2 $ 194.8 $
671.2 $ 583.3 OSB 350.9 282.1 944.3 751.9 EWP 98.1 80.7 274.4 230.5
South America 38.3 31.7 114.8 103.2 Other 6.5 7.6 22.3 20.3
Intersegment sales (1.7 ) (0.5 ) (3.7 ) (5.8 ) $ 718.3 $
596.4 $ 2,023.3 $ 1,683.4 Operating profit
(loss): Siding $ 52.8 $ 35.2 $ 141.5 $ 103.9 OSB 126.4 67.4 289.4
126.7 EWP 6.3 — 12.0 (2.0 ) South America 5.8 3.3 16.4 15.3 Other
(1.6 ) (0.4 ) (2.7 ) (1.0 ) Other operating credits and charges,
net 0.9 — (4.5 ) (11.4 ) Gain (loss) on sale or impairment of
long-lived assets, net (0.7 ) (0.3 ) 1.8 (1.0 ) General corporate
and other expenses, net (30.0 ) (26.9 ) (85.7 ) (78.1 ) Interest
expense, net of capitalized interest (4.9 ) (9.0 ) (14.8 ) (26.3 )
Investment income 2.9 2.5 7.2 6.4 Loss on early debt extinguishment
— (13.2 ) — (13.2 ) Other non-operating items (0.6 ) (0.5 ) (2.4 )
1.4 Income from operations before taxes 157.3 58.1 358.2
120.7 Provision for income taxes 46.4 (7.5 ) 97.9
13.1 Income from continuing operations $ 110.9 $ 65.6
$ 260.3 $ 107.6
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES SUMMARY OF
PRODUCTION VOLUMES
The following table sets forth production
volumes for the quarter and nine months ended September 30,
2017 and 2016.
Quarter Ended Nine Months Ended September 30, September 30,
2017 2016 2017 2016 Oriented strand board, million
square feet 3/8" basis 1,116 1,116 3,269 3,262 Oriented strand
board, million square feet 3/8" basis (produced by North America
non-OSB segment mills) 83 63 245 189 Wood-based siding, million
square feet 3/8" basis 353 316 1,038 1,001 Engineered I-Joist,
million lineal feet (1) 22 21 66 61 Laminated veneer lumber (LVL)
and laminated strand lumber (LSL), million cubic feet (1) (2) 2.8
2.4 8.6 7.5
(1) Includes purchases of products from
joint ventures or purchased under contract manufacturing
arrangements.
(2) Includes LVL and LSL production which
is used in the production of I-Joist as well as sold as end
products.
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version on businesswire.com: http://www.businesswire.com/news/home/20171106005189/en/
Louisiana-Pacific CorporationMedia RelationsMark Morrison,
615-986-5886orInvestor RelationsBecky Barckley, 615-986-5600orMike
Kinney, 615-986-5600
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