Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported results
today for the third quarter of 2018, which included the
following:
- Net sales for the third quarter of $737
million were higher by 3 percent compared to the year ago
quarter.
- Income from continuing operations was
$124 million ($0.86 per diluted share).
- Non-GAAP adjusted income from
continuing operations was $120 million ($0.83 per diluted
share).
- Adjusted EBITDA from continuing
operations for the third quarter was $193 million.
- Deployed approximately $60 million in
cash to repurchase 2.1 million shares during the third
quarter.
“We are pleased to report our third quarter results which
highlight solid strategic and operational execution. Against a
backdrop of OSB pricing headwinds, our results continue to validate
our strategy to transform LP into a leading building solutions
company and also show the strength in our value-add and specialty
products, including LP SmartSide® siding and trim,” said Brad
Southern, LP Chief Executive Officer.
THIRD QUARTER RESULTS
For the third quarter of 2018, LP reported net sales of $737
million, up from $718 million in the third quarter of 2017. LP
reported income from continuing operations of $124 million, or
$0.86 per diluted share, as compared to $111 million, or $0.76 per
diluted share for the third quarter of 2017. Adjusted EBITDA from
continuing operations in the third quarter of 2018 was $193 million
compared to $194 million in the third quarter of 2017.
YEAR TO DATE RESULTS
For the nine months ended September 30, 2018, LP reported net
sales of $2.2 billion compared to $2.0 billion in the first nine
months of 2017. LP reported income from continuing operations of
$382 million, or $2.62 per diluted share, compared to $260 million,
or $1.78 per diluted share, for the same period in 2017. Adjusted
EBITDA from continuing operations for the first nine months of 2018
was $595 million compared to $475 million for 2017.
SIDING SEGMENT
The 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
$241 million in the third quarter of 2018, an increase of $15
million from $226 million in the third quarter of 2017. For the
third quarter of 2018, the Siding segment reported operating income
of $60 million compared to $53 million in the third quarter of
2017. For the third quarter of 2018, adjusted EBITDA from
continuing operations for this segment was $68 million compared to
$62 million in the third quarter of 2017. The OSB sold in this
segment accounted for approximately $5 million in the adjusted
EBITDA from continuing operations for this segment.
For the first nine months, Siding reported sales of $729
million, up 9 percent from the prior year and had an operating
income of $168 million compared to $143 million in 2017. Adjusted
EBITDA from continuing operations was $193 million compared to $167
million in 2017. OSB sold in this segment accounted for
approximately $20 million of the adjusted EBITDA from continuing
operations for this segment.
ORIENTED STRAND BOARD (OSB) SEGMENT
The OSB segment manufactures and distributes OSB structural
panel products. The OSB segment reported net sales of $349 million
in the third quarter of 2018, a decrease of $2 million from $351
million of net sales in the third quarter of 2017. The OSB segment
reported operating income of $115 million compared to $127 million
in the third quarter of 2017. Adjusted EBITDA from continuing
operations for this segment was $131 million compared to $142
million in the third quarter of 2017. The decrease in selling price
negatively impacted operating results and adjusted EBITDA from
continuing operations by approximately $4 million for the quarter
as compared to the third quarter of 2017.
For the first nine months, OSB reported sales of $1.0 billion,
up 11 percent from the prior year and had an operating income of
$370 million compared to $291 million in 2017. Adjusted EBITDA from
continuing operations was $414 million compared to $336 million in
2017. The increase in selling price favorably impacted results and
Adjusted EBITDA from continuing operations by approximately $117
million for the first nine months as compared to 2017.
ENGINEERED WOOD PRODUCTS SEGMENT (EWP)
The EWP segment is comprised of I-Joist (IJ), Laminated Veneer
Lumber (LVL) and Laminated Strand Lumber (LSL). EWP reported net
sales of $105 million in the third quarter of 2018, an increase of
$7 million, from $98 million in the third quarter of 2017. The EWP
segment reported operating income of $9 million compared to $7
million in the third quarter of 2017. Adjusted EBITDA from
continuing operations for this segment was $12 million compared to
$11 million in the third quarter of 2017.
For the first nine months, EWP reported sales of $315 million,
up 15 percent from the prior year and had an operating income of
$20 million compared to $13 million in 2017. Adjusted EBITDA from
continuing operations was $33 million compared to $24 million in
2017.
SOUTH AMERICA SEGMENT
The South American segment consists of facilities in Chile and
Brazil and sales offices in Peru and Argentina. The segment
reported net sales of $35 million in the third quarter of 2018, a
decrease of $3 million from $38 million in the third quarter of
2017. The South America segment reported operating income of $7
million compared to $6 million in the third quarter of 2017.
Adjusted EBITDA from continuing operations for this segment was $9
million compared to $8 million in the third quarter of 2017.
For the first nine months, South America reported sales of $122
million, up 6 percent from the prior year and had operating income
of $25 million compared to $16 million in 2017. Adjusted EBITDA
from continuing operations was $32 million compared to $23 million
in 2017.
COMPANY OUTLOOK
“Looking forward, while we are encouraged by the overall
fundamentals in housing, we have experienced pricing declines in
OSB associated with some recent supply and demand imbalances. To
address this, we will continue to adjust our commodity OSB
production to reflect changes in demand. We remain confident in our
ability to deliver on our commitments to shareholders by returning
capital through dividends and share repurchases while prudently
operating our assets and investing in key growth opportunities to
continue our transition to more value-add and specialty products,”
Southern concluded.
About LP
Louisiana-Pacific Corporation is a leading building products
solutions company that invents, manufactures and delivers uniquely
engineered, innovative building products that are backed by
unparalleled service, strong customer support and industry leading
warranties. With operations in the U.S., Canada, Chile and Brazil,
LP helps builders, contractors, architects, engineers and home
owners build smarter, better, faster and more efficiently. Founded
in 1973, LP is headquartered in Nashville, Tennessee and traded on
the New York Stock Exchange under LPX. For more information, visit
www.lpcorp.com.
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. Factors that
could cause actual results to differ materially from those
expressed or implied by the forward-looking statements include, but
are not limited to, the following: changes in governmental fiscal
and monetary policies, tariffs and levels of employment; changes in
general economic conditions; changes in the cost and availability
of capital; changes in the level of home construction and repair
activity; changes in competitive conditions and prices for our
products; changes in the relationship between supply of and demand
for building products; changes in the relationship between supply
of and demand for raw materials, including wood fiber and resins,
used in manufacturing our products; changes in the cost of and
availability of energy, primarily natural gas, electricity and
diesel fuel; changes in the cost of and availability of
transportation; changes in other significant operating expenses;
changes in exchange rates between the U.S. dollar and other
currencies, particularly the Canadian dollar, Brazilian real and
Chilean peso; changes in general and industry-specific
environmental laws and regulations; changes in tax laws, and
interpretations thereof; changes in circumstances giving rise to
environmental liabilities or expenditures; the resolution of
existing and future product-related litigation and other legal
proceedings; and acts of public authorities, war, civil unrest,
natural disasters, fire, floods, earthquakes, inclement weather and
other matters beyond our control. 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
INCOMELOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions, except per
share amounts) (Unaudited)
Quarter Ended Nine Months Ended September 30, September 30,
2018 2017 2018 2017 Net sales $ 736.8 $
718.3 $ 2,238.9 $ 2,023.3 Cost of sales 524.0 507.7
1,588.7 1,502.3 Gross profit 212.8 210.6 650.2 521.0
Selling, general and administrative expenses 51.2 49.3 151.9
145.3 (Gain) loss on sale or impairment of long lived assets, net
0.3 0.7 (0.3 ) (1.8 ) Other operating credits and charges, net (6.3
) (0.9 ) (11.2 ) 4.5 Income from operations 167.6 161.5
509.8 373.0 Non-operating income (expense): Interest
expense, net of capitalized interest (3.9 ) (4.9 ) (12.7 ) (14.8 )
Investment income 5.5 2.9 13.5 7.2 Other non-operating items (2.2 )
(2.2 ) (4.3 ) (7.2 ) Total non-operating income (expense) (0.6 )
(4.2 ) (3.5 ) (14.8 ) Income from continuing operations
before taxes and equity in loss of unconsolidated affiliate 167.0
157.3 506.3 358.2 Provision for income taxes 41.8 46.4 122.7 97.9
Equity in loss of unconsolidated affiliate 1.1 — 1.7
— Income from continuing operations 124.1 110.9 381.9
260.3 Loss from discontinued operations before taxes (0.1 )
(1.7 ) (5.7 ) (1.7 ) Benefit for income taxes — (0.6 ) (1.4
) (0.6 ) Loss from discontinued operations (0.1 ) (1.1 ) (4.3 )
(1.1 ) Net income $ 124.0 $ 109.8 $ 377.6
$ 259.2 Net income per share of common stock:
Income from continuing operations $ 0.87 $ 0.77 $ 2.65 $ 1.80 Loss
from discontinued operations — (0.01 ) (0.03 ) (0.01 ) Net
income per share - basic $ 0.87 $ 0.76 $ 2.62
$ 1.79 Diluted net income per share of common stock: Income
from continuing operations $ 0.86 $ 0.76 $ 2.62 $ 1.78 Loss from
discontinued operations — (0.01 ) (0.03 ) (0.01 ) Net income
per share - diluted $ 0.86 $ 0.75 $ 2.59 $
1.77 Weighted average shares of stock outstanding -
basic 142.5 144.5 143.9 144.4 Weighted
average shares of stock outstanding - diluted 143.9 146.5
145.6 146.3
CONSOLIDATED BALANCE
SHEETSLOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES(Dollar amounts
in millions) (Unaudited)
September 30, 2018
December 31, 2017 ASSETS Cash and cash equivalents $ 986.7 $ 928.0
Receivables, net of allowance for doubtful accounts of $0.8 million
and $0.9 million at September 30, 2018 and December 31, 2017 143.5
142.5 Inventories 284.4 259.1 Prepaid expenses and other current
assets 11.9 7.8 Current portion of notes receivable from asset
sales — 22.2 Total current assets 1,426.5 1,359.6
Timber and timberlands 56.8 55.7 Property, plant and equipment, net
976.2 926.1 Goodwill and other intangible assets 26.3 26.7
Investments in and advances to affiliates 52.6 7.8 Restricted cash
13.3 13.3 Other assets 59.8 56.8 Deferred tax asset 2.9 2.5
Total assets $ 2,614.4 $ 2,448.5 LIABILITIES
AND EQUITY Current portion of long-term debt $ 5.2 $ 25.1 Accounts
payable and accrued liabilities 213.7 237.1 Income taxes payable
11.6 4.5 Current portion of contingency reserves 2.3 3.4
Total current liabilities 232.8 270.1
Long-term debt, excluding current portion 348.6 350.8 Deferred
income taxes 73.5 33.4 Contingency reserves, excluding current
portion 9.4 11.7 Other long-term liabilities 138.7 178.0
Stockholders’ equity: Common stock 153.4 153.4 Additional paid-in
capital 456.5 470.6 Retained earnings 1,613.9 1,280.1 Treasury
stock (264.4 ) (177.5 ) Accumulated comprehensive loss (148.0 )
(122.1 ) Total stockholders’ equity 1,811.4 1,604.5
Total liabilities and stockholders’ equity $ 2,614.4 $
2,448.5
CONSOLIDATED CASH FLOW
STATEMENTLOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES(Dollar
amounts in millions) (Unaudited)
Quarter Ended Nine Months Ended September 30, September 30, 2018
2017 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 124.0 $ 109.8 $ 377.6 $ 259.2 Adjustments to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization 30.7 31.1 91.8 91.3 Equity in
(income) loss of unconsolidated affiliates, including dividends 1.3
(0.2 ) 0.2 (1.2 ) (Gain) loss on sale or impairment of long-lived
assets, net 0.3 0.7 (0.3 ) (1.8 ) Other operating credits and
charges, net (6.2 ) (0.9 ) (6.9 ) 4.5 Stock-based compensation
related to stock plans 2.1 2.0 6.9 8.0 Exchange (gain) loss on
remeasurement 0.5 (0.1 ) 0.5 1.6 Cash settlements of warranties,
net of accruals (0.7 ) 0.1 (2.2 ) (5.5 ) Cash settlements of
contingencies, net of accruals (0.6 ) (0.3 ) (2.1 ) (0.5 ) Pension
contributions (35.8 ) (6.1 ) (40.9 ) (12.7 ) Pension expense 2.3
2.9 6.9 8.8 Other adjustments, net (0.1 ) 0.2 0.6 0.4 Changes in
assets and liabilities: (Increase) decrease in receivables 19.2
(17.1 ) (26.2 ) (61.9 ) (Increase) decrease in inventories 1.7 (8.5
) (11.7 ) 4.5 (Increase) decrease in prepaid expenses 1.1 0.6 (4.1
) (2.7 ) Increase (decrease) in accounts payable and accrued
liabilities 1.9 18.1 (17.6 ) 12.8 Increase in income taxes 9.5
11.1 46.7 0.2 Net cash provided by
operating activities 151.2 143.4 419.2 305.0
CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and
equipment additions (62.8 ) (35.0 ) (150.4 ) (80.7 ) Proceeds from
sales of assets — 0.1 0.9 3.3 Investments in unconsolidated
affiliate — — (45.0 ) — Payment of long-term deposit — — — (32.0 )
Receipt of proceeds from notes receivable from asset sales — — 22.2
— Other investing activities (0.1 ) 0.1 (0.4 ) 0.3
Net cash used in investing activities (62.9 ) (34.8 ) (172.7 )
(109.1 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of
long-term debt (22.1 ) (1.2 ) (22.4 ) (2.5 ) Payment of cash
dividends (18.5 ) — (56.1 ) — Purchase of treasury stock (59.8 ) —
(98.7 ) — Sale of common stock, net of cash payments under equity
plans — — 0.1 (0.4 ) Taxes paid related to net share settlement of
equity awards (1.5 ) (0.5 ) (9.3 ) (5.3 ) Other financing
activities — — 3.1 — Net cash used in
financing activities (101.9 ) (1.7 ) (183.3 ) (8.2 ) EFFECT OF
EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH (0.6 )
1.8 (4.5 ) 1.7 Net increase in cash, cash equivalents
and restricted cash (14.2 ) 108.7 58.7 189.4 Cash, cash equivalents
and restricted cash at beginning of period 1,014.2 753.2
941.3 672.5 Cash, cash equivalents and
restricted cash at end of period $ 1,000.0 $ 861.9 $
1,000.0 $ 861.9
LOUISIANA-PACIFIC CORPORATION AND
SUBSIDIARIESSELECTED SEGMENT INFORMATION(Dollar amounts in
millions) (Unaudited)
Quarter Ended Nine Months Ended September 30, September 30, 2018
2017 2018 2017 Net sales: Siding $ 240.8 $ 226.2 $
729.4 $ 671.2 OSB 349.1 350.9 1,049.8 944.3 EWP 104.8 98.1 314.6
274.4 South America 34.5 38.3 122.2 114.8 Other 7.6 6.5 22.9 22.3
Intersegment sales — (1.7 ) — (3.7 ) $ 736.8 $
718.3 $ 2,238.9 $ 2,023.3 Operating profit
(loss): Siding $ 59.8 $ 53.3 $ 167.8 $ 142.9 OSB 114.8 126.8 369.6
290.6 EWP 8.5 6.5 19.9 12.6 South America 6.5 5.8 25.0 16.4 Other
(1.2 ) (1.6 ) (2.9 ) (2.7 ) Other operating credits and charges,
net 6.3 0.9 11.2 (4.5 ) Gain (loss) on sale or impairment of
long-lived assets, net (0.3 ) (0.7 ) 0.3 1.8 General corporate and
other expenses, net (27.9 ) (29.5 ) (82.8 ) (84.1 ) Interest
expense, net of capitalized interest (3.9 ) (4.9 ) (12.7 ) (14.8 )
Investment income 5.5 2.9 13.5 7.2 Other non-operating items (2.2 )
(2.2 ) (4.3 ) (7.2 ) Income from continuing operations before taxes
165.9 157.3 504.6 358.2 Provision for income taxes 41.8 46.4
122.7 97.9 Income from continuing operations $
124.1 $ 110.9 $ 381.9 $ 260.3
LOUISIANA-PACIFIC CORPORATION AND
SUBSIDIARIESKEY STATISTICS
Quarter EndedSeptember 30,
Nine Months EndedSeptember 30,
Housing starts1: 2018
2017 2018 2017 Single
Family 235.6 229.6 687.7 648.6 Multi-Family 95.0 87.8
284.5 263.6 330.6 317.4 972.2 912.2 1
Actual U.S. Housing starts data reported by U.S. Census Bureau
The following table sets forth sales volumes for the quarter and
nine months ended September 30, 2018 and 2017.
Quarter Ended September 30, 2018 Quarter Ended
September 30, 2017
Sales Volume Siding
OSB EWP Total
Siding OSB EWP
Total SmartSide® Strand siding (MMSF) 290.6 — — 290.6
263.2 — — 263.2 SmartSide® fiber siding (MMSF) 62.1 — — 62.1 65.3 —
— 65.3 CanExel® siding (MMSF) 6.8 — — 6.8 11.8 — — 11.8 OSB -
commodity (MMSF) 46.6 660.1 3.5 710.2 62.8 686.6 6.3 755.7 OSB -
value added (MMSF) 1.2 435.0 9.1 445.3 — 402.3 10.2 412.5 LVL
(MMCF) — — 1.7 1.7 — — 1.9 1.9 LSL (MMCF) — — 1.1 1.1 — — 0.8 0.8
I-joist (MMLF) — — 23.6 23.6 — — 22.8 22.8 Nine Months Ended
September 30, 2018 Nine Months Ended September 30, 2017
Sales
Volume Siding OSB EWP
Total Siding OSB
EWP Total SmartSide® Strand siding (MMSF)
862.0 — — 862.0 797.2 — — 797.2 SmartSide® fiber siding (MMSF)
175.4 — — 175.4 197.5 — — 197.5 CanExel® siding (MMSF) 31.7 — —
31.7 40.6 — — 40.6 OSB - commodity (MMSF) 111.6 1,938.6 28.9
2,079.1 189.0 1,973.8 25.9 2,188.7 OSB - value added (MMSF) 58.8
1,218.3 29.8 1,306.9 — 1,207.5 30.2 1,237.7 LVL (MMCF) — — 5.6 5.6
— — 5.7 5.7 LSL (MMCF) — — 3.1 3.1 — — 2.4 2.4 I-joist (MMLF) — —
69.1 69.1 — — 66.0 66.0
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version on businesswire.com: https://www.businesswire.com/news/home/20181106005171/en/
Louisiana-Pacific CorporationMedia Relations:Mark Morrison,
615-986-5886orInvestor Relations:Becky Barckley, 615-986-5600orMike
Kinney, 615-986-5600
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