NASHVILLE, Tenn., Aug. 2, 2023
/PRNewswire/ -- Louisiana-Pacific Corporation (LP) (NYSE: LPX), a
leading manufacturer of high-performance building products, today
reported its financial results for the three and six months ended
June 30, 2023.
Key Highlights for Second Quarter 2023, Compared to Second
Quarter 2022
- Siding Solutions net sales decreased by 11% to $318 million on lower volumes partially offset by
higher prices
- Oriented Strand Board (OSB) net sales decreased by 66% to
$229 million, primarily due to lower
prices
- Consolidated net sales decreased by 46% to $611 million
- Income (loss) attributed to LP from continuing operations
decreased by $367 million to
$(20) million (or $(0.28) per diluted share) due in part to
one-time charges detailed below
- Adjusted EBITDA(1) was $93
million, a decrease of $398
million
- Adjusted Diluted EPS(1) was $0.55 per share, a decrease of $3.64 per share
- Cash provided by operating activities was $88 million
(1)
|
This is a non-GAAP
financial measure. See "Use of Non-GAAP Information",
"Reconciliation of Net Income to Non-GAAP Adjusted EBITDA, Non-GAAP
Adjusted Income, and Non-GAAP Adjusted Diluted EPS"
below.
|
Capital Allocation Update
- Paid $80 million to acquire Wawa
facility assets
- Paid $74 million in capital
expenditures during the second quarter
- Paid $17 million in cash
dividends during the second quarter
- Declared a quarterly cash dividend of $0.24 per share
- Amended Credit Facility balance of $30
million as of June 30,
2023
- Cash and cash equivalents of $71
million as of June 30,
2023
- Availability of $200 million
remaining under the 2022 Share Repurchase Program
"LP earned $93 million in EBITDA
in the quarter while operating with exceptional safety and
efficiency," said Brad Southern,
Chair & Chief Executive Officer. "As the housing outlook
continues to improve, I am confident that LP's strategy positions
us well for long-term growth."
Outlook
Our guidance is based on current plans and expectations and is
subject to a number of known and unknown uncertainties and risks,
including those set forth below under "Forward-Looking
Statements."
- Siding Solutions full year 2023 revenue is expected to decrease
year-over-year by approximately 10%
- OSB third quarter 2023 revenue is expected to be sequentially
higher than the second quarter 2023 by at least 50%, assuming that
OSB prices published by Random Lengths remain unchanged from those
published on July 28, 2023 (this is
an assumption for modeling purposes and not a price forecast)
- Under these assumptions, third quarter 2023 Adjusted
EBITDA(2) is expected to be in the range of $160 million and $180
million
- Given our current outlook, capital expenditures for 2023 are
expected to be in the range of $290
million to $310 million,
including $120 million to
$130 million for mill conversions,
$120 million to $125 million for sustaining maintenance, and
$50 million to $55 million for other strategic growth
projects
(2)
|
This is a non-GAAP
financial measure. With respect to Adjusted EBITDA for the second
quarter of 2023, certain items that affect net income on a GAAP
basis, such as business exit charges, product-line discontinuance
charges, other operating credits and charges, net, loss on early
debt extinguishment, investment income, and other non-operating
items, that would be required to be included in the comparable
forecasted GAAP measures cannot be reasonably predicted at this
time, and LP is unable to quantify such amounts that would be
required to be included in the comparable forecasted GAAP measures,
without unreasonable effort. As such, the Company is unable to
provide a reasonable estimate of GAAP net income, or a
corresponding reconciliation of Adjusted EBITDA to net
income.
|
Second Quarter 2023 Highlights
Net sales for the second quarter of 2023 decreased
year-over-year by $519 million (or
46%). This included a decrease in OSB segment revenue of
$444 million or 66%, driven by 57%
lower average selling prices and 21% lower volumes. Siding segment
revenue decreased $37 million or 10%,
due to 16% lower volume offset by 6% higher prices. The remaining
decrease in net sales was related to decreases in South America segment and other revenue of
$18 million and $20 million, respectively.
Income (loss) attributed to LP from continuing operations for
the second quarter of 2023 decrease year-over-year by $367 million (or 106%) to $(20) million, or $(0.28) per diluted share. This primarily
reflects a $398 million decrease in Adjusted EBITDA,
$34 million of business exit charges
(of which, $30 million were non-cash
charges) related to an off-site framing operation (Entekra
Holdings, LLC), and $16 million of
settlements of OSB patent-related claims, partially offset by a
$95 million lower income tax provision.
First Six Months of 2023 Highlights
Net sales for the first six months of 2023 decreased
year-over-year by $1,102 million (or
48%). This included a decrease in OSB revenue of $998 million or 70%, due to 61% lower prices and
24% lower volume. Siding segment revenue decreased $38 million or 5%, due to 13% lower volume offset
by 8% higher prices. The remaining decrease in net sales was
related to decreases in South
America segment and other revenue of $29 million and $38
million, respectively.
Income attributed to LP from continuing operations for the first
six months of 2023 decreased year-over-year by $768 million (or 100%) to $1 million, or $0.02 per diluted share. The decrease primarily
reflects a $930 million decrease in
Adjusted EBITDA, $34 million of
business exit charges (of which, $30
million were non-cash charges) related to an off-site
framing operation (Entekra Holdings, LLC), and $16 million of settlements of OSB patent-related
claims, partially offset by a $218 million lower income tax
provision.
Segment Results
Siding
The Siding segment serves diverse end markets with a broad
product offering of engineered wood siding, trim, and fascia,
including LP® SmartSide® Trim & Siding,
LP® SmartSide® ExpertFinish® Trim
& Siding, LP BuilderSeries® Lap Siding, and
LP® Outdoor Building
SolutionsTM (collectively referred to as Siding
Solutions).
Segment sales and Adjusted EBITDA for this segment were as
follows (dollar amounts in millions):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Net sales
|
$
320
|
|
$
358
|
|
(10) %
|
|
$
651
|
|
$
689
|
|
(5) %
|
Adjusted
EBITDA
|
59
|
|
78
|
|
(24) %
|
|
126
|
|
160
|
|
(21) %
|
|
Three Months Ended
June 30, 2023
versus 2022
|
|
Six Months Ended
June 30, 2023
versus 2022
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
Siding
Solutions
|
6 %
|
|
(16) %
|
|
8 %
|
|
(13) %
|
The effects of list price increases drove year-over-year
increases in the average net selling price for the three and six
months ended June 30, 2023. The
volume decreases for the three and six months ended June 30, 2023 were driven by challenging new and
existing home selling markets and elevated levels of channel
inventory compared to the prior periods.
Adjusted EBITDA decreased year-over-year by $19 million in the second quarter of 2023,
reflecting the net impact of lower volumes, $6 million of raw material inflation, and
$6 million of discretionary
investments in support of future growth, including siding mill
conversions and sales and marketing costs, partially offset by
higher average selling prices. The year-over-year decrease in
Adjusted EBITDA of $34 million for
the six months ended June 30, 2023,
reflects the net impact of lower volumes, $20 million of raw material inflation, and
$9 million of discretionary
investments in support of future growth, including siding mill
conversions and sales and marketing costs, partially offset by
higher average selling prices.
Oriented Strand Board (OSB)
The OSB segment manufactures and distributes OSB structural
panel products including our value-added OSB portfolio known as
LP® Structural Solutions (which includes LP®
TechShield® Radiant Barrier, LP WeatherLogic®
Air & Water Barrier, LP Legacy® Premium
Sub-Flooring, LP NovaCore® Thermal Insulated Sheathing,
LP® FlameBlock® Fire-Rated Sheathing), and
LP® TopNotch® Sub-Flooring). OSB is
manufactured using wood strands arranged in layers and bonded with
resins.
Segment sales and Adjusted EBITDA for this segment were as
follows (dollar amounts in millions):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Net sales
|
$
229
|
|
$
673
|
|
(66) %
|
|
$
418
|
|
$
1,417
|
|
(70) %
|
Adjusted
EBITDA
|
37
|
|
403
|
|
(91) %
|
|
42
|
|
908
|
|
(95) %
|
|
Three Months Ended
June 30, 2023
versus 2022
|
|
Six Months Ended
June 30, 2023
versus 2022
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
OSB - Structural
Solutions
|
(59) %
|
|
(20) %
|
|
(58) %
|
|
(29) %
|
OSB -
Commodity
|
(55) %
|
|
(23) %
|
|
(66) %
|
|
(18) %
|
The year-over-year net sales decrease of $444 million for the three months ended
June 30, 2023 reflects a $368 million decrease in OSB prices, a
$33 million decrease in sales volume
from production curtailments, and a $28
million decrease related to production volume from the
conversion of our Sagola, Michigan
mill to siding production. The year-over-year net sales decrease of
$998 million for the six months ended
June 30, 2023 reflects an
$838 million decrease in OSB prices,
an $84 million decrease in sales
volume from production curtailments, and a $55 million decrease related in production volume
from the conversion of the Sagola
mill to siding production.
The year-over-year decreases in Adjusted EBITDA of $366 million and $866
million for the three and six months ended June 30, 2023, respectively, reflects lower OSB
prices and sales volumes (as described above), partially offset by
lower mill-related costs.
South America
LP's South America segment
manufactures and distributes OSB structural panel and siding
products in South America and
certain export markets. This segment has manufacturing operations
in two countries, Chile and
Brazil, and operates sales offices
in Chile, Brazil, Peru,
Colombia, Argentina, Paraguay, and Mexico.
Segment sales and Adjusted EBITDA for this segment were as
follows (dollar amounts in millions):
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Net sales
|
$
53
|
|
$
70
|
|
(25) %
|
|
$
108
|
|
$
137
|
|
(21) %
|
Adjusted
EBITDA
|
13
|
|
26
|
|
(52) %
|
|
24
|
|
51
|
|
(53) %
|
|
Three Months Ended
June 30, 2023
versus 2022
|
|
Six Months Ended
June 30, 2023
versus 2022
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
OSB - Structural
Solutions
|
(17) %
|
|
(15) %
|
|
(14) %
|
|
(13) %
|
Siding
|
20 %
|
|
(17) %
|
|
— %
|
|
18 %
|
South America net sales
decreased year-over-year by $18
million and $29 million for
the three and six months ended June 30,
2023, respectively, predominantly driven by lower OSB sales
volumes and average selling prices.
The year-over-year decrease in Adjusted EBITDA of $14 million and $27
million for the three and six months ended June 30, 2023, respectively, reflects the lower
sales volumes and average selling prices (described above) as well
as higher raw material costs.
Conference Call
LP will hold a conference call to discuss this release today at
11 a.m. Eastern Time (8 a.m. Pacific Time). Investors will have the
opportunity to listen to the conference call live by going to
investor.lpcorp.com and clicking "Events Calendar" at least 15
minutes early to register and download and install any necessary
audio software. For those who cannot listen to the live broadcast,
the recorded webcast and accompanying presentation will be
available to the public online in the "Past Events" section of
investor.lpcorp.com.
About LP Building Solutions
As a leader in high-performance building solutions,
Louisiana-Pacific Corporation (LP Building Solutions, NYSE: LPX)
manufactures engineered wood building products that meet the
demands of builders, remodelers, and homeowners worldwide. LP's
extensive offerings include innovative and dependable building
products and accessories, such as Siding Solutions (LP®
SmartSide® Trim & Siding, LP®
SmartSide® ExpertFinish® Trim & Siding,
LP BuilderSeries® Lap Siding, and LP® Outdoor
Building SolutionsTM), LP® Structural
Solutions (LP® TechShield® Radiant Barrier,
LP WeatherLogic® Air & Water Barrier, LP
Legacy® Premium Sub-Flooring, LP®
FlameBlock® Fire-Rated Sheathing, LP
NovaCoreTM Thermal Insulated Sheathing, and
LP® TopNotch® 350 Durable Sub-Flooring), and
oriented strand board (OSB). In addition to product solutions, LP
provides industry-leading customer service and warranties. Since
its founding in 1972, LP has been Building a Better World™ by
helping customers construct beautiful, durable homes while our
stockholders build lasting value. Headquartered in Nashville, Tennessee, LP operates 22 plants
across the U.S., Canada,
Chile, and Brazil. For more information, visit
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. These statements
are based upon the beliefs and assumptions of, and on information
available to, our management; assumptions upon which such
forward-looking statements are based are also forward-looking
statements. Forward-looking statements can be identified by words
such as "may," "will," "could," "should," "believe," "expect,"
"anticipate," "intend," "plan," "estimate," "project," "potential,"
"continue," "likely," or "future" or the negative or other
variations thereof and include other statements regarding matters
that are not historical facts. Examples of forward-looking
statements include, among others, statements LP makes regarding
plans for product development, forecasts of future costs and
expenditures, possible outcomes of legal proceedings, capacity
expansion, and other growth initiatives, and the adequacy of
reserves for loss contingencies. 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, including tariffs and levels of employment; changes in
general and global economic conditions, including impacts from
global pandemics, rising inflation, supply chain disruptions, and
the ongoing military conflict between Russia and Ukraine; changes in the cost and availability
of capital; changes in the level of home construction and repair
and remodel 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 financial or business
conditions of third-party wholesale distributors and dealers;
changes in the relationship between the supply of and demand for
raw materials, including wood fiber and resins, used in
manufacturing our products; changes in the cost and availability of
energy, primarily natural gas, electricity, and diesel fuel;
changes in the cost and availability of transportation; impact of
manufacturing our products internationally; difficulties in the
launch or production ramp-up of newly introduced products; impacts
from public health issues (including global pandemics) on the
economy, demand for our products or our operations, including the
actions and recommendations of governmental authorities to contain
such public health issues; unplanned interruptions to our
manufacturing operations, such as explosions, fires, inclement
weather, natural disasters, accidents, equipment failures, labor
shortages or disruptions, transportation interruptions, supply
interruptions, public health issues (including pandemics and
quarantines), riots, civil insurrection or social unrest, looting,
protests, strikes, and street demonstrations; changes in other
significant operating expenses; changes in currency values and
exchange rates between the U.S. dollar and other currencies,
particularly the Canadian dollar, Brazilian real, and Chilean peso;
changes in, and compliance with, general and industry-specific laws
and regulations, including environmental and health and safety laws
and regulations, the U.S. Foreign Corrupt Practices Act and
anti-bribery laws, laws related to our international business
operations, and changes in building codes and standards; changes in
tax laws and interpretations thereof; changes in circumstances
giving rise to environmental liabilities or expenditures; warranty
costs exceeding our warranty reserves; challenges to or
exploitation of our intellectual property or other proprietary
information by others in the industry; the resolution of existing
and future product-related litigation, environmental proceedings
and remediation efforts, and other legal or environmental
proceedings or matters; the effect of covenants and events of
default contained in our debt instruments; the amount and timing of
any repurchases of our common stock and the payment of dividends on
our common stock, which will depend on market and business
conditions and other considerations; cybersecurity events affecting
our information technology systems or those of our third-party
providers and the related costs and impact of any disruption on our
business; and acts of public authorities, war, political or civil
unrest, natural disasters, fire, floods, earthquakes, inclement
weather, and other matters beyond our control. For additional
information about factors that could cause actual results, events,
and circumstances to differ materially from those described in the
forward-looking statements, please refer to LP's filings with the
Securities and Exchange Commission (SEC). We urge you to consider
all of the risks, uncertainties, and factors identified above or
discussed in such reports carefully in evaluating the
forward-looking statements in this news release. We cannot assure
you that the results reflected in or implied by any forward-looking
statement will be realized or even if substantially realized, that
those results will have the forecasted or expected consequences and
effects for or on our operations or financial performance. The
forward-looking statements made today are as of the date of this
news release. Except as required by law, LP undertakes no
obligation to update any such forward-looking statements to reflect
new information, subsequent events, or circumstances.
Use of Non-GAAP Information
In evaluating our business, we utilize non-GAAP financial
measures that fall within the meaning of SEC Regulation G and
Regulation S-K Item 10(e), which we believe provide users of the
financial information with additional meaningful comparison to
prior reported results. Non-GAAP financial measures do not have
standardized definitions and are not defined by U.S. generally
accepted accounting principles (GAAP). In this press release, we
disclose income (loss) attributed to LP from continuing operations
before interest expense, provision for income taxes, depreciation
and amortization, and excluding stock-based compensation expense,
loss on impairment attributed to LP, business exit charges,
product-line discontinuance charges, other operating credits and
charges, net, loss on early debt extinguishment, investment income,
pension settlement charges, and other non-operating items, as
Adjusted EBITDA from continuing operations (Adjusted EBITDA), which
is a non-GAAP financial measure. We have included Adjusted EBITDA
in this report because we view it as an important supplemental
measure of our performance and believe that it is frequently used
by interested persons in the evaluation of companies that have
different financing and capital structures and/or tax rates. We
also disclose income (loss) attributed to LP from continuing
operations, excluding loss on impairment attributed to LP, business
exit charges, product-line discontinuance charges, interest expense
outside of normal operations, other operating credits and charges,
net, loss on early debt extinguishment, gain (loss) on acquisition,
and pension settlement charges, and adjusting for a normalized tax
rate as Adjusted Income (Adjusted Income). We also disclose
Adjusted Diluted EPS, which is calculated as Adjusted Income
divided by diluted shares outstanding. We believe that Adjusted
Diluted EPS and Adjusted Income are useful measures for evaluating
our ability to generate earnings and that providing these measures
should allow interested persons to more readily compare the
earnings for past and future periods.
Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS are
not substitutes for the U.S. GAAP measures of Net income (loss),
Income (loss) attributed to LP from continuing operations, and
Income (loss) attributed to LP from continuing operations per
diluted share or for any other U.S. GAAP measures of operating
performance. It should be noted that other companies may present
similarly titled measures differently, and therefore, as presented
by us, these measures may not be comparable to similarly titled
measures reported by other companies. Adjusted EBITDA, Adjusted
Income, and Adjusted Diluted EPS have material limitations as
performance measures because they exclude items that are actually
incurred or experienced in connection with the operation of our
business.
During the three months ended June 30,
2023, we updated our definition of Adjusted EBITDA, Adjusted
Income, and Adjusted Diluted EPS to exclude other business exit
charges not classified as discontinued operations. Business exit
charges consist of inventory and other asset impairment and exit
charges related to the exit of other businesses not individually
significant. We consider business exit charges to be outside the
performance of our ongoing core business operations and believe
that presenting Adjusted EBITDA, Adjusted Income, and Adjusted
Diluted EPS excluding business exit charges provides increased
transparency as to the operating costs of our current business
performance. We did not revise prior years' Adjusted EBITDA,
Adjusted Income, and Adjusted Diluted EPS amounts because there
were no significant costs similar in nature to these items.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
|
LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES
|
(DOLLAR AMOUNTS IN
MILLIONS, EXCEPT PER SHARE AMOUNTS)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
$
611
|
|
$
1,130
|
|
$
1,195
|
|
$
2,297
|
Cost of
sales
|
(492)
|
|
(611)
|
|
(975)
|
|
(1,158)
|
Gross
profit
|
119
|
|
518
|
|
220
|
|
1,139
|
Selling, general, and
administrative expenses
|
(66)
|
|
(67)
|
|
(133)
|
|
(129)
|
Impairment of
long-lived assets, net
|
(24)
|
|
—
|
|
(24)
|
|
—
|
Other operating
credits and charges, net
|
(21)
|
|
11
|
|
(26)
|
|
10
|
Income from
operations
|
8
|
|
462
|
|
37
|
|
1,019
|
Interest
expense
|
(3)
|
|
(3)
|
|
(6)
|
|
(6)
|
Investment
income
|
2
|
|
2
|
|
7
|
|
3
|
Other non-operating
items
|
(8)
|
|
2
|
|
(16)
|
|
(8)
|
Income (loss) before
income taxes
|
(1)
|
|
463
|
|
22
|
|
1,007
|
Provision for income
taxes
|
(21)
|
|
(116)
|
|
(22)
|
|
(240)
|
Equity in
unconsolidated affiliate
|
1
|
|
1
|
|
1
|
|
2
|
Income (loss) from
continuing operations
|
(21)
|
|
348
|
|
1
|
|
769
|
Income from
discontinued operations, net of income taxes
|
—
|
|
37
|
|
—
|
|
$
99
|
Net income
(loss)
|
$
(21)
|
|
$
385
|
|
$
1
|
|
$
868
|
Net loss attributed to
non-controlling interest
|
1
|
|
—
|
|
—
|
|
1
|
Net income (loss)
attributed to LP
|
$
(20)
|
|
$
384
|
|
$
1
|
|
$
868
|
|
|
|
|
|
|
|
|
Net income (loss)
attributed to LP per share of common stock:
|
|
|
|
|
|
|
|
Income (loss) per
share continuing operations - basic
|
$
(0.28)
|
|
$
4.30
|
|
$
0.02
|
|
$
9.25
|
Income per share
discontinued operations - basic
|
—
|
|
0.46
|
|
—
|
|
1.18
|
Net income (loss)
attributed to LP per share - basic
|
$
(0.28)
|
|
$
4.76
|
|
$
0.02
|
|
$
10.43
|
|
|
|
|
|
|
|
|
Income (loss) per
share continuing operations - diluted
|
$
(0.28)
|
|
$
4.28
|
|
$
0.02
|
|
$
9.19
|
Income per share
discontinued operations - diluted
|
—
|
|
0.45
|
|
—
|
|
1.18
|
Net income (loss)
attributed to LP per share - diluted
|
$
(0.28)
|
|
$
4.73
|
|
$
0.02
|
|
$
10.36
|
|
|
|
|
|
|
|
|
Average shares of
common stock used to compute Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
72
|
|
81
|
|
72
|
|
83
|
Diluted
|
72
|
|
81
|
|
72
|
|
84
|
CONDENSED CONSOLIDATED
BALANCE SHEET (UNAUDITED)
|
LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES
|
(DOLLAR AMOUNTS IN
MILLIONS)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
71
|
|
$
369
|
Receivables
|
172
|
|
127
|
Inventories
|
407
|
|
337
|
Prepaid expenses and
other current assets
|
21
|
|
20
|
Total current
assets
|
671
|
|
854
|
|
|
|
|
Timber and
timberlands
|
32
|
|
40
|
Property, plant, and
equipment, net
|
1,504
|
|
1,326
|
Operating lease
assets
|
31
|
|
44
|
Goodwill and other
intangible assets
|
27
|
|
36
|
Investments in and
advances to affiliates
|
6
|
|
6
|
Restricted
cash
|
—
|
|
14
|
Other assets
|
24
|
|
24
|
Deferred tax
asset
|
8
|
|
7
|
Total
assets
|
$
2,302
|
|
$
2,350
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Accounts payable and
accrued liabilities
|
$
262
|
|
$
317
|
Income tax
payable
|
5
|
|
19
|
Total current
liabilities
|
267
|
|
336
|
|
|
|
|
Long-term
debt
|
377
|
|
346
|
Deferred income
taxes
|
127
|
|
113
|
Non-current operating
lease liabilities
|
33
|
|
41
|
Other long-term
liabilities
|
54
|
|
53
|
Contingency reserves,
excluding current portion
|
26
|
|
26
|
Total
liabilities
|
883
|
|
916
|
|
|
|
|
Redeemable
noncontrolling interest
|
—
|
|
—
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
88
|
|
88
|
Additional paid-in
capital
|
458
|
|
462
|
Retained
earnings
|
1,337
|
|
1,371
|
Treasury
stock
|
(387)
|
|
(388)
|
Accumulated
comprehensive loss
|
(78)
|
|
(99)
|
Total stockholders'
equity
|
1,419
|
|
1,433
|
Total liabilities
and stockholders' equity
|
$
2,302
|
|
$
2,350
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW (UNAUDITED)
|
LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES
|
(DOLLAR AMOUNTS IN
MILLIONS)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(21)
|
|
$
385
|
|
$
1
|
|
$
868
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
29
|
|
33
|
|
57
|
|
65
|
Impairment of goodwill
and long-lived assets
|
24
|
|
—
|
|
24
|
|
—
|
Gain on sale of
assets, net
|
—
|
|
—
|
|
—
|
|
(39)
|
Pension loss due to
settlement
|
—
|
|
—
|
|
6
|
|
—
|
Deferred
taxes
|
12
|
|
16
|
|
10
|
|
27
|
Other adjustments,
net
|
32
|
|
7
|
|
41
|
|
12
|
Changes in assets and
liabilities (net of acquisitions and divestitures):
|
|
|
|
|
|
|
|
Receivables
|
(14)
|
|
61
|
|
(22)
|
|
(66)
|
Inventories
|
8
|
|
12
|
|
(68)
|
|
(43)
|
Prepaid expenses and
other current assets
|
2
|
|
(14)
|
|
(1)
|
|
(11)
|
Accounts payable and
accrued liabilities
|
21
|
|
34
|
|
(45)
|
|
31
|
Income taxes payable,
net of receivables
|
(3)
|
|
(51)
|
|
(33)
|
|
65
|
Net cash (used)
provided by operating activities
|
88
|
|
483
|
|
(30)
|
|
908
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Property, plant, and
equipment additions
|
(74)
|
|
(103)
|
|
(188)
|
|
(196)
|
Acquisition of facility
assets
|
(80)
|
|
—
|
|
(80)
|
|
—
|
Proceeds from sales of
assets
|
—
|
|
—
|
|
1
|
|
—
|
Proceeds from
divestiture of business
|
—
|
|
—
|
|
—
|
|
59
|
Other investing
activities, net
|
(4)
|
|
1
|
|
(4)
|
|
2
|
Net cash used in
investing activities
|
(158)
|
|
(102)
|
|
(271)
|
|
(135)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowing of long-term
debt
|
70
|
|
—
|
|
70
|
|
—
|
Repayment of long-term
debt
|
(40)
|
|
—
|
|
(40)
|
|
—
|
Payment of cash
dividends
|
(17)
|
|
(18)
|
|
(35)
|
|
(37)
|
Purchase of
stock
|
—
|
|
(471)
|
|
—
|
|
(575)
|
Other financing
activities
|
1
|
|
—
|
|
(9)
|
|
(15)
|
Net cash provided
by (used in) financing activities
|
14
|
|
(489)
|
|
(14)
|
|
(626)
|
EFFECT OF EXCHANGE
RATE ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
—
|
|
(13)
|
|
3
|
|
(2)
|
Net (decrease) increase
in cash, cash equivalents, and restricted cash
|
(56)
|
|
(121)
|
|
(313)
|
|
145
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
126
|
|
637
|
|
383
|
|
371
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
71
|
|
$
516
|
|
$
71
|
|
$
516
|
LOUISIANA-PACIFIC CORPORATION
AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
The following tables set forth: (1) housing starts, (2) our
North American sales volume, and (3) Overall Equipment
Effectiveness (OEE). We consider these items to be key performance
indicators because LP's management uses these metrics to evaluate
our business and trends, measure our performance, and make
strategic decisions, and believes that the key performance
indicators presented provide additional perspective and insights
when analyzing the core operating performance of LP. These key
performance indicators should not be considered superior to, as a
substitute for or as an alternative to, and should be considered in
conjunction with, the U.S. GAAP financial measures presented
herein. These measures may not be comparable to similarly-titled
performance indicators used by other companies.
We monitor housing starts, which is a leading external indicator
of residential construction in the United
States that correlates with the demand for many of our
products. We believe that this is a useful measure for evaluating
our results and that providing this measure should allow interested
persons to more readily compare our sales volume for past and
future periods to an external indicator of product demand. Other
companies may present housing start data differently and therefore,
as presented by us, our housing start data may not be comparable to
similarly-titled indicators reported by other companies.
The following table sets forth housing starts for the three and
six months ended June 30, 2023 and 2022:
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Housing
starts1:
|
|
|
|
|
|
|
|
Single-Family
|
261
|
|
303
|
|
450
|
|
570
|
Multi-Family
|
138
|
|
147
|
|
264
|
|
270
|
|
399
|
|
450
|
|
714
|
|
840
|
|
1Actual U.S.
housing starts data reported by U.S. Census Bureau as published
through July 19, 2023.
|
We monitor sales volumes for our products in our Siding, OSB and
South America segments, which we
define as the number of units of our products sold within the
applicable period. Evaluating sales volume by product type helps us
identify and address changes in product demand, broad market
factors that may affect our performance, and opportunities for
future growth. It should be noted that other companies may present
sales volumes differently and, therefore, as presented by us, sales
volumes may not be comparable to similarly-titled measures reported
by other companies. We believe that sales volumes can be a useful
measure for evaluating and understanding our business.
The following table sets forth sales volumes for the three and
six months ended June 30, 2023 and 2022:
|
Three Months Ended
June 30, 2023
|
|
Three Months Ended
June 30, 2022
|
Sales
Volume
|
Siding
|
OSB
|
South
America
|
Total
|
|
Siding
|
OSB
|
South
America
|
Total
|
Siding Solutions
(MMSF)
|
377
|
—
|
7
|
384
|
|
448
|
—
|
9
|
457
|
OSB - Structural
Solutions (MMSF)
|
—
|
412
|
128
|
540
|
|
—
|
514
|
149
|
664
|
OSB - commodity
(MMSF)
|
—
|
354
|
—
|
354
|
|
—
|
460
|
—
|
460
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2023
|
|
Six Months Ended
June 30, 2022
|
Sales
Volume
|
Siding
|
OSB
|
South
America
|
Total
|
|
Siding
|
OSB
|
South
America
|
Total
|
Siding Solutions
(MMSF)
|
760
|
—
|
19
|
779
|
|
869
|
—
|
16
|
885
|
OSB - value added
(MMSF)
|
—
|
739
|
255
|
993
|
|
—
|
1,040
|
293
|
1,333
|
OSB - commodity
(MMSF)
|
—
|
736
|
—
|
736
|
|
—
|
897
|
—
|
897
|
We measure OEE of each of our mills to track improvements in the
utilization and productivity of our manufacturing assets. OEE is a
composite metric that considers asset uptime (adjusted for capital
project downtime and similar events), production rates, and
finished product quality. It should be noted that other companies
may present OEE differently and, therefore, as presented by us, OEE
may not be comparable to similarly-titled measures reported by
other companies. We believe that when used in conjunction with
other metrics, OEE can be a useful measure for evaluating our
ability to generate profits, and that providing this measure should
allow interested persons to more readily monitor operational
improvements.
OEE for the three and six months ended June 30, 2023 and
2022 for each of our segments is listed below:
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Siding
|
78 %
|
|
76 %
|
|
77 %
|
|
75 %
|
OSB
|
75 %
|
|
71 %
|
|
75 %
|
|
73 %
|
South
America
|
74 %
|
|
75 %
|
|
75 %
|
|
75 %
|
LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES
|
SELECTED SEGMENT
INFORMATION
|
(DOLLAR AMOUNTS IN
MILLIONS)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
|
|
|
|
|
|
|
Siding
|
$
320
|
|
$
358
|
|
$
651
|
|
$
689
|
OSB
|
229
|
|
673
|
|
418
|
|
1,417
|
South
America
|
53
|
|
70
|
|
108
|
|
137
|
Other
|
9
|
|
30
|
|
17
|
|
55
|
Intersegment
sales
|
—
|
|
(1)
|
|
—
|
|
(2)
|
Total
sales
|
$
611
|
|
$
1,130
|
|
$
1,195
|
|
$
2,297
|
LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES
|
RECONCILIATION OF NET
INCOME TO NON-GAAP ADJUSTED EBITDA, NON-GAAP ADJUSTED INCOME, AND
NON-GAAP ADJUSTED DILUTED EPS
|
(DOLLAR AMOUNTS IN
MILLIONS EXCEPT PER SHARE AMOUNTS)
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
(loss)
|
$
(21)
|
|
$
385
|
|
$
1
|
|
$
868
|
Add
(deduct):
|
|
|
|
|
|
|
|
Net loss attributed to
non-controlling interest
|
1
|
|
—
|
|
—
|
|
1
|
Income from
discontinued operations, net of income taxes
|
—
|
|
(37)
|
|
—
|
|
(99)
|
Income (loss)
attributed to LP from continuing operations
|
(20)
|
|
348
|
|
1
|
|
770
|
Provision for income
taxes
|
21
|
|
116
|
|
22
|
|
240
|
Depreciation and
amortization
|
29
|
|
32
|
|
57
|
|
64
|
Stock-based
compensation expense
|
3
|
|
6
|
|
7
|
|
13
|
Other operating credits
and charges, net
|
17
|
|
(11)
|
|
22
|
|
(10)
|
Business exit
charges
|
34
|
|
—
|
|
34
|
|
—
|
Interest
expense
|
3
|
|
3
|
|
6
|
|
6
|
Investment
income
|
(2)
|
|
(2)
|
|
(7)
|
|
(3)
|
Other non-operating
items
|
8
|
|
(2)
|
|
11
|
|
8
|
Pension settlement
charges
|
—
|
|
—
|
|
6
|
|
—
|
Adjusted
EBITDA
|
$
93
|
|
$
491
|
|
$
159
|
|
$
1,089
|
|
|
|
|
|
|
|
|
Siding
|
$
59
|
|
$
78
|
|
$
126
|
|
$
160
|
OSB
|
37
|
|
403
|
|
42
|
|
908
|
South
America
|
13
|
|
26
|
|
24
|
|
51
|
Other
|
(6)
|
|
(7)
|
|
(14)
|
|
(13)
|
Corporate
|
(9)
|
|
(9)
|
|
(19)
|
|
(17)
|
Adjusted
EBITDA
|
$
93
|
|
$
491
|
|
$
159
|
|
$
1,089
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income (loss)
attributed to LP from continuing operations per share -
diluted
|
$
(0.28)
|
|
$
4.28
|
|
$
0.02
|
|
$
9.19
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(21)
|
|
$
385
|
|
$
1
|
|
$
868
|
Add
(deduct):
|
|
|
|
|
|
|
|
Net loss attributed to
non-controlling interest
|
1
|
|
—
|
|
—
|
|
1
|
Income from
discontinued operations, net of income taxes
|
—
|
|
(37)
|
|
—
|
|
(99)
|
Income (loss)
attributed to LP from continuing operations
|
(20)
|
|
348
|
|
1
|
|
770
|
Other operating credits
and charges, net
|
17
|
|
(11)
|
|
22
|
|
(10)
|
Business exit
charges
|
34
|
|
—
|
|
34
|
|
—
|
Pension settlement
charges
|
—
|
|
—
|
|
6
|
|
—
|
Reported tax
provision
|
21
|
|
116
|
|
22
|
|
240
|
Adjusted income before
tax
|
53
|
|
453
|
|
86
|
|
1,001
|
Normalized tax
provision at 25%
|
(13)
|
|
(113)
|
|
(21)
|
|
(250)
|
Adjusted
Income
|
$
39
|
|
$
340
|
|
$
64
|
|
$
751
|
Diluted shares
outstanding
|
72
|
|
81
|
|
72
|
|
84
|
Adjusted Diluted
EPS
|
$
0.55
|
|
$
4.19
|
|
$
0.89
|
|
$
8.96
|
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SOURCE LP Building Solutions