NASHVILLE, Tenn., Nov. 1, 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 nine months ended
September 30, 2023.
Key Highlights for Third Quarter 2023, Compared to Third
Quarter 2022
- Siding Net sales decreased by 13% to $345 million on lower volumes partially offset by
higher prices
- Oriented Strand Board (OSB) Net sales decreased by 14% to
$335 million, primarily due to lower
volumes partially offset by higher prices
- Consolidated Net sales decreased by 15% to $728 million
- Income attributed to LP from continuing operations decreased by
$11 million to $118 million
- Income attributed to LP from continuing operations per diluted
share decreased $0.11 to $1.63 per share
- Adjusted EBITDA(1) was $190
million, a decrease of $10
million
- Adjusted Diluted EPS(1) was $1.62 per share, a decrease of $0.10 per share
- Cash provided by operating activities was $187 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 $49 million in capital
expenditures during the third quarter
- Paid $17 million in cash
dividends during the third quarter
- Declared a quarterly cash dividend of $0.24 per share
- Fully repaid all outstanding amount under the Amended Credit
Facility as of September 30,
2023
- Cash and cash equivalents of $160
million and borrowing availability under our revolving
credit facility of $550 million as of
September 30, 2023, resulting in
total liquidity of approximately $710
million
- Availability of $200 million
remaining under the share repurchase program authorized in
May 2022
"As expected, Siding sales volume, price, and net sales all
increased sequentially compared to the second quarter, and we
believe Siding inventories have normalized," said Brad Southern, Chair and Chief Executive
Officer. "I want to thank all LP employees for their dedication and
execution, and for the strong results they delivered in the third
quarter."
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 full-year 2023 Net sales is expected to decrease
year-over-year by approximately 10%
- OSB fourth quarter 2023 Net sales is expected to be
sequentially lower than the third quarter 2023 by approximately
30%, assuming that OSB prices published by Random Lengths remain
unchanged from those published on October
27, 2023 (this is an assumption for modeling purposes and
not a price forecast)
- Under these assumptions, fourth quarter 2023 Adjusted
EBITDA(2) is expected to be $60
million to $80 million
- Given our current outlook, capital expenditures for 2023 are
expected to be in the range of $280
million to $295 million,
including $100 million to
$105 million for mill conversions,
$130 million to $135 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 fourth quarter of 2023, certain items that
affect net income on a GAAP basis, such as business exit charges,
product 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, LP is unable to provide a reasonable estimate of GAAP net
income, or a corresponding reconciliation of Adjusted EBITDA to net
income.
Third Quarter 2023 Highlights
Net sales for the third quarter of 2023 decreased year-over-year
by $124 million (or 15%). This
included a decrease in Siding segment revenue of $50 million, or 13%, due to 16% lower volumes
partially offset by 3% higher prices. OSB segment revenue decreased
by $53 million, or 14%, driven by 19%
lower volumes and 6% higher average selling prices. The remaining
decrease in Net sales was related to decreases in the South America segment and other revenue of
$9 million and $13 million, respectively.
Income attributed to LP from continuing operations for the
third quarter of 2023 decreased year-over-year by $11 million (or 9%) to $118 million, or $1.63 per diluted share. This primarily reflects
a $10 million decrease in Adjusted EBITDA.
First Nine Months of 2023 Highlights
Net sales for the first nine months of 2023 decreased
year-over-year by $1,226 million (or
39%), including a decrease in OSB revenue of $1,051 million or 58%, due to 47% lower prices
and 22% lower volumes. Siding segment revenue decreased by
$87 million or 8%, due to 14% lower
volumes offset by 6% higher prices. The remaining decrease in Net
sales was related to decreases in the South America segment and other revenue of
$38 million and $51 million, respectively.
Income attributed to LP from continuing operations for the
first nine months of 2023 decreased year-over-year by $779 million (or 87%) to $119 million, or $1.65 per diluted share. The decrease primarily
reflects a $940 million decrease in
Adjusted EBITDA, $35 million of
business exit charges (of which $31 million were non-cash
charges) related to an off-site framing operation (Entekra
Holdings, LLC), and a $16 million
settlement 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Net sales
|
$
345
|
|
$
394
|
|
(13) %
|
|
$
996
|
|
$
1,083
|
|
(8) %
|
Adjusted
EBITDA
|
71
|
|
90
|
|
(21) %
|
|
198
|
|
251
|
|
(21) %
|
|
Three Months Ended
September 30,
2023 versus 2022
|
|
Nine Months Ended
September 30,
2023 versus 2022
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
Siding Solutions
|
3 %
|
|
(16) %
|
|
6 %
|
|
(14) %
|
The effects of list price increases drove year-over-year
increases in the average net selling price for the three and nine
months ended September 30, 2023. The
volume decreases for the three and nine months ended September 30, 2023 were driven by record results
in the comparable periods and challenging new and existing home
selling markets in the current periods.
Adjusted EBITDA decreased year-over-year by $19 million in the third quarter of 2023,
reflecting the net impact of lower volumes and $5 million of press rebuild costs, partially
offset by higher average selling prices and $9 million in lower inflationary costs including
freight, raw materials, and labor. Adjusted EBITDA decreased
year-over-year by $53 million for the
nine months ended September 30, 2023,
which reflects the net impact of lower volumes, $8 million in discretionary investments to
support future growth (including siding mill conversions and sales
and marketing costs), and $5 million
in press rebuild costs, partially offset by higher average selling
prices and $13 million in lower
inflationary costs (including freight, raw materials, and
labor).
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® 350 Durable 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Net sales
|
$
335
|
|
$
388
|
|
(14) %
|
|
$
754
|
|
$
1,805
|
|
(58) %
|
Adjusted
EBITDA
|
120
|
|
113
|
|
6 %
|
|
161
|
|
1,021
|
|
(84) %
|
|
Three Months Ended
September 30,
2023 versus 2022
|
|
Nine Months Ended
September 30,
2023 versus 2022
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
OSB - Structural
Solutions
|
(5) %
|
|
(10) %
|
|
(46) %
|
|
(23) %
|
OSB -
Commodity
|
18 %
|
|
(26) %
|
|
(47) %
|
|
(21) %
|
The year-over-year Net sales decrease of $53 million for the three months ended
September 30, 2023 reflects a
$28 million increase in OSB prices, a
$33 million decrease in sales volumes
primarily from market curtailments, and $43
million less production volume due to the conversion of our
Sagola, Michigan mill to siding
production. The year-over-year Net sales decrease of $1,051 million for the nine months ended
September 30, 2023 reflects an
$813 million decrease in OSB prices,
a $115 million decrease in sales
volumes primarily from market curtailments, and a $98 million decrease related to production
volumes from the conversion of the Sagola mill to siding production.
Adjusted EBITDA increased year-over-year by $7 million in the third quarter of 2023,
reflecting the net impact of higher OSB commodity prices and lower
mill-related costs, partially offset by lower sales volumes.
Adjusted EBITDA decreased year-over-year by $860 million for the nine months ended
September 30, 2023, which reflects
the net impact of lower OSB commodity prices and sales volumes,
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 Argentina, Brazil, Chile, Colombia, Mexico, Paraguay, and Peru.
Segment sales and Adjusted EBITDA for this segment were as
follows (dollar amounts in millions):
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Net sales
|
$
45
|
|
$
53
|
|
(16) %
|
|
$
153
|
|
$
190
|
|
(20) %
|
Adjusted
EBITDA
|
6
|
|
14
|
|
(54) %
|
|
31
|
|
65
|
|
(53) %
|
|
Three Months Ended
September 30,
2023 versus 2022
|
|
Nine Months Ended
September 30,
2023 versus 2022
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
|
Average Net
Selling Price
|
|
Unit
Shipments
|
OSB - Structural
Solutions
|
(7) %
|
|
(9) %
|
|
(13) %
|
|
(12) %
|
Siding
|
18 %
|
|
(32) %
|
|
5 %
|
|
— %
|
South America Net sales decreased
year-over-year by $8 million and
$38 million for the three and nine
months ended September 30, 2023,
respectively, predominantly driven by lower OSB sales volumes and
average selling prices.
The year-over-year decreases in Adjusted EBITDA of $7 million and $34
million for the three and nine months ended September 30, 2023, respectively, reflect the
lower sales volumes and average selling prices (described above)
and equipment relocation cost of $3
million.
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
NovaCore® 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 23 plants
across the U.S., Canada,
Chile, and Brazil through foreign subsidiaries, and
operates additional facilities through a joint venture. 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
ongoing military conflicts including the conflict between
Russia and Ukraine and the conflict in Israel and the surrounding areas; 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 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 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. Reconciliations of Adjusted
EBITDA, Adjusted Income and Adjusted Diluted EPS to their most
directly comparable U.S. GAAP financial measure, Net income, are
presented below.
Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS are
not substitutes for the U.S. GAAP measures of Net income, Income
attributed to LP from continuing operations, and Income 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 nine months ended September
30, 2023, we updated our definitions 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
$
728
|
|
$
852
|
|
$
1,923
|
|
$
3,149
|
Cost of
sales
|
(514)
|
|
(620)
|
|
(1,489)
|
|
(1,778)
|
Gross
profit
|
214
|
|
232
|
|
434
|
|
1,370
|
Selling, general, and
administrative expenses
|
(58)
|
|
(67)
|
|
(191)
|
|
(196)
|
Impairment of
long-lived assets, net
|
(1)
|
|
—
|
|
(25)
|
|
—
|
Other operating
credits and charges, net
|
6
|
|
7
|
|
(20)
|
|
17
|
Income from
operations
|
161
|
|
172
|
|
198
|
|
1,191
|
Interest
expense
|
(4)
|
|
(3)
|
|
(9)
|
|
(9)
|
Investment
income
|
4
|
|
5
|
|
10
|
|
8
|
Other non-operating
items
|
—
|
|
(3)
|
|
(17)
|
|
(11)
|
Income before income
taxes
|
160
|
|
172
|
|
183
|
|
1,178
|
Provision for income
taxes
|
(44)
|
|
(44)
|
|
(66)
|
|
(284)
|
Equity in
unconsolidated affiliate
|
1
|
|
1
|
|
3
|
|
4
|
Income from
continuing operations
|
118
|
|
129
|
|
119
|
|
898
|
Income from
discontinued operations, net of income taxes
|
—
|
|
97
|
|
—
|
|
$
196
|
Net
income
|
$
118
|
|
$
226
|
|
$
119
|
|
$
1,093
|
Net loss
attributed to non-controlling interest
|
—
|
|
—
|
|
—
|
|
1
|
Net income
attributed to LP
|
$
118
|
|
$
226
|
|
$
119
|
|
$
1,094
|
|
|
|
|
|
|
|
|
Net income
attributed to LP per share of common stock:
|
|
|
|
|
|
|
|
Income per share
continuing operations - basic
|
$
1.63
|
|
$
1.75
|
|
$
1.65
|
|
$
11.23
|
Income per share
discontinued operations - basic
|
—
|
|
1.32
|
|
—
|
|
2.45
|
Net income attributed
to LP per share - basic
|
$
1.63
|
|
$
3.07
|
|
$
1.65
|
|
$
13.67
|
|
|
|
|
|
|
|
|
Income per share
continuing operations - diluted
|
$
1.63
|
|
$
1.74
|
|
$
1.65
|
|
$
11.16
|
Income per share
discontinued operations - diluted
|
—
|
|
1.31
|
|
—
|
|
2.43
|
Net income attributed
to LP per share - diluted
|
$
1.63
|
|
$
3.05
|
|
$
1.65
|
|
$
13.59
|
|
|
|
|
|
|
|
|
Average shares of
common stock used to compute Net income per share:
|
|
|
|
|
|
|
|
Basic
|
72
|
|
74
|
|
72
|
|
80
|
Diluted
|
72
|
|
74
|
|
72
|
|
80
|
CONDENSED CONSOLIDATED
BALANCE SHEET (UNAUDITED)
|
LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES
|
(DOLLAR AMOUNTS IN
MILLIONS)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
160
|
|
$
369
|
Receivables
|
181
|
|
127
|
Inventories
|
379
|
|
337
|
Prepaid expenses and
other current assets
|
25
|
|
20
|
Total current
assets
|
745
|
|
854
|
|
|
|
|
Timber and
timberlands
|
32
|
|
40
|
Property, plant, and
equipment, net
|
1,512
|
|
1,326
|
Operating lease
assets
|
34
|
|
44
|
Goodwill and other
intangible assets
|
27
|
|
36
|
Investments in and
advances to affiliates
|
6
|
|
6
|
Restricted
cash
|
—
|
|
14
|
Other assets
|
19
|
|
24
|
Deferred tax
asset
|
4
|
|
7
|
Total
assets
|
$
2,380
|
|
$
2,350
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Accounts payable and
accrued liabilities
|
$
264
|
|
$
317
|
Income tax
payable
|
2
|
|
19
|
Total current
liabilities
|
266
|
|
336
|
|
|
|
|
Long-term
debt
|
347
|
|
346
|
Deferred income
taxes
|
152
|
|
113
|
Non-current operating
lease liabilities
|
35
|
|
41
|
Other long-term
liabilities
|
53
|
|
53
|
Contingency reserves,
excluding current portion
|
25
|
|
26
|
Total
liabilities
|
878
|
|
916
|
|
|
|
|
Redeemable
noncontrolling interest
|
—
|
|
—
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
88
|
|
88
|
Additional paid-in
capital
|
460
|
|
462
|
Retained
earnings
|
1,438
|
|
1,371
|
Treasury
stock
|
(387)
|
|
(388)
|
Accumulated
comprehensive loss
|
(98)
|
|
(99)
|
Total stockholders'
equity
|
1,502
|
|
1,433
|
Total liabilities
and stockholders' equity
|
$
2,380
|
|
$
2,350
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW (UNAUDITED)
|
LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES
|
(DOLLAR AMOUNTS IN
MILLIONS)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
$
118
|
|
$
226
|
|
$
119
|
|
$
1,093
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
30
|
|
34
|
|
87
|
|
99
|
Impairment of goodwill
and long-lived assets
|
1
|
|
—
|
|
25
|
|
—
|
Gain on sale of
assets, net
|
(6)
|
|
(118)
|
|
(6)
|
|
(157)
|
Pension loss due to
settlement
|
—
|
|
4
|
|
6
|
|
4
|
Deferred
taxes
|
34
|
|
1
|
|
44
|
|
27
|
Other adjustments,
net
|
7
|
|
18
|
|
48
|
|
29
|
Changes in assets and
liabilities (net of acquisitions and divestitures):
|
|
|
|
|
|
|
|
Receivables
|
(30)
|
|
46
|
|
(52)
|
|
(20)
|
Inventories
|
22
|
|
(29)
|
|
(46)
|
|
(72)
|
Prepaid expenses and
other current assets
|
(5)
|
|
—
|
|
(5)
|
|
(11)
|
Accounts payable and
accrued liabilities
|
10
|
|
9
|
|
(36)
|
|
40
|
Income taxes payable,
net of receivables
|
7
|
|
5
|
|
(26)
|
|
70
|
Net cash provided
by operating activities
|
187
|
|
195
|
|
157
|
|
1,103
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Property, plant, and
equipment additions
|
(49)
|
|
(86)
|
|
(236)
|
|
(282)
|
Acquisition of facility
assets
|
—
|
|
—
|
|
(80)
|
|
—
|
Proceeds from sales of
assets
|
8
|
|
—
|
|
9
|
|
—
|
Proceeds from
divestiture of business
|
—
|
|
206
|
|
—
|
|
265
|
Other investing
activities, net
|
—
|
|
1
|
|
(4)
|
|
3
|
Net cash (used
in) provided by investing activities
|
(41)
|
|
121
|
|
(312)
|
|
(14)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowing of long-term
debt
|
10
|
|
—
|
|
80
|
|
—
|
Repayment of long-term
debt
|
(40)
|
|
—
|
|
(80)
|
|
—
|
Payment of cash
dividends
|
(17)
|
|
(16)
|
|
(52)
|
|
(53)
|
Purchase of
stock
|
—
|
|
(325)
|
|
—
|
|
(900)
|
Other financing
activities
|
—
|
|
—
|
|
(10)
|
|
(15)
|
Net cash used in
financing activities
|
(48)
|
|
(341)
|
|
(61)
|
|
(968)
|
EFFECT OF EXCHANGE
RATE ON CASH, CASH EQUIVALENTS,
AND RESTRICTED CASH
|
(9)
|
|
(9)
|
|
(6)
|
|
(11)
|
Net (decrease) increase
in cash, cash equivalents, and restricted cash
|
90
|
|
(34)
|
|
(223)
|
|
111
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
71
|
|
516
|
|
383
|
|
371
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
160
|
|
$
482
|
|
$
160
|
|
$
482
|
LOUISIANA-PACIFIC CORPORATION
AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
The following tables set forth: (1) housing starts, (2) our
North American sales volumes, 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 volumes 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
nine months ended September 30, 2023 and 2022:
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Housing
starts1:
|
|
|
|
|
|
|
|
Single-Family
|
258
|
|
242
|
|
708
|
|
812
|
Multi-Family
|
104
|
|
144
|
|
369
|
|
414
|
|
362
|
|
386
|
|
1,077
|
|
1,225
|
|
1Actual U.S.
housing starts data reported by U.S. Census Bureau as published
through October 18, 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 volumes 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
nine months ended September 30, 2023 and 2022:
|
Three Months Ended
September 30, 2023
|
|
Three Months Ended
September 30, 2022
|
Sales
Volume
|
Siding
|
OSB
|
South
America
|
Total
|
|
Siding
|
OSB
|
South
America
|
Total
|
Siding Solutions
(MMSF)
|
398
|
—
|
6
|
405
|
|
471
|
—
|
9
|
480
|
OSB - Structural
Solutions (MMSF)
|
—
|
412
|
115
|
528
|
|
—
|
460
|
127
|
587
|
OSB - commodity
(MMSF)
|
—
|
401
|
—
|
401
|
|
—
|
544
|
—
|
544
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2023
|
|
Nine Months Ended
September 30, 2022
|
Sales
Volume
|
Siding
|
OSB
|
South
America
|
Total
|
|
Siding
|
OSB
|
South
America
|
Total
|
Siding Solutions
(MMSF)
|
1,158
|
—
|
25
|
1,183
|
|
1,340
|
—
|
25
|
1,365
|
OSB - value added
(MMSF)
|
—
|
1,151
|
370
|
1,521
|
|
—
|
1,499
|
420
|
1,919
|
OSB - commodity
(MMSF)
|
—
|
1,137
|
—
|
1,137
|
|
—
|
1,441
|
—
|
1,441
|
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 nine months ended September 30, 2023
and 2022 for each of our segments is listed below:
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Siding
|
77 %
|
|
76 %
|
|
77 %
|
|
75 %
|
OSB
|
74 %
|
|
70 %
|
|
75 %
|
|
72 %
|
South
America
|
74 %
|
|
64 %
|
|
74 %
|
|
72 %
|
LOUISIANA-PACIFIC
CORPORATION AND SUBSIDIARIES
|
SELECTED SEGMENT
INFORMATION
|
(DOLLAR AMOUNTS IN
MILLIONS)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
|
|
|
|
|
|
|
Siding
|
$
345
|
|
$
394
|
|
$
996
|
|
$
1,083
|
OSB
|
335
|
|
388
|
|
754
|
|
1,805
|
South
America
|
45
|
|
53
|
|
153
|
|
190
|
Other
|
4
|
|
17
|
|
21
|
|
72
|
Intersegment
sales
|
—
|
|
(1)
|
|
—
|
|
(2)
|
Total
sales
|
$
728
|
|
$
852
|
|
$
1,923
|
|
$
3,149
|
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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
income
|
$
118
|
|
$
226
|
|
$
119
|
|
$
1,093
|
Add
(deduct):
|
|
|
|
|
|
|
|
Net loss attributed to
non-controlling interest
|
—
|
|
—
|
|
—
|
|
1
|
Income from
discontinued operations, net of income taxes
|
—
|
|
(97)
|
|
—
|
|
(196)
|
Income attributed to LP
from continuing operations
|
118
|
|
129
|
|
119
|
|
898
|
Provision for income
taxes
|
44
|
|
44
|
|
66
|
|
284
|
Depreciation and
amortization
|
30
|
|
32
|
|
87
|
|
96
|
Stock-based
compensation expense
|
2
|
|
2
|
|
9
|
|
15
|
Loss on impairment
attributed to LP
|
1
|
|
—
|
|
1
|
|
—
|
Other operating credits
and charges, net
|
(7)
|
|
(7)
|
|
16
|
|
(17)
|
Business exit
charges
|
1
|
|
—
|
|
35
|
|
—
|
Interest
expense
|
4
|
|
3
|
|
9
|
|
9
|
Investment
income
|
(4)
|
|
(5)
|
|
(10)
|
|
(8)
|
Other non-operating
items
|
—
|
|
(1)
|
|
11
|
|
7
|
Pension settlement
charges
|
—
|
|
4
|
|
6
|
|
4
|
Adjusted
EBITDA
|
$
190
|
|
$
200
|
|
$
349
|
|
$
1,289
|
|
|
|
|
|
|
|
|
Siding
|
$
71
|
|
$
90
|
|
$
198
|
|
$
251
|
OSB
|
120
|
|
113
|
|
161
|
|
1,021
|
South
America
|
6
|
|
14
|
|
31
|
|
65
|
Other
|
—
|
|
(7)
|
|
(15)
|
|
(19)
|
Corporate
|
(7)
|
|
(11)
|
|
(26)
|
|
(29)
|
Adjusted
EBITDA
|
$
190
|
|
$
200
|
|
$
349
|
|
$
1,289
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
attributed to LP from continuing
operations per share - diluted
|
$
1.63
|
|
$
1.74
|
|
$
1.65
|
|
$
11.16
|
|
|
|
|
|
|
|
|
Net
income
|
$
118
|
|
$
226
|
|
$
119
|
|
$
1,093
|
Add
(deduct):
|
|
|
|
|
|
|
|
Net loss attributed to
non-controlling interest
|
—
|
|
—
|
|
—
|
|
1
|
Income from
discontinued operations, net of income taxes
|
—
|
|
(97)
|
|
—
|
|
(196)
|
Income attributed to LP
from continuing operations
|
118
|
|
129
|
|
119
|
|
898
|
Loss on impairment
attributed to LP
|
1
|
|
—
|
|
1
|
|
—
|
Other operating credits
and charges, net
|
(7)
|
|
(7)
|
|
16
|
|
(17)
|
Business exit
charges
|
1
|
|
—
|
|
35
|
|
—
|
Pension settlement
charges
|
—
|
|
4
|
|
6
|
|
4
|
Reported tax
provision
|
44
|
|
44
|
|
66
|
|
284
|
Adjusted income before
tax
|
157
|
|
170
|
|
242
|
|
1,171
|
Normalized tax
provision at 25%
|
(39)
|
|
(42)
|
|
(61)
|
|
(293)
|
Adjusted
Income
|
$
117
|
|
$
127
|
|
$
182
|
|
$
878
|
Diluted shares
outstanding
|
72
|
|
74
|
|
72
|
|
80
|
Adjusted Diluted
EPS
|
$
1.62
|
|
$
1.72
|
|
$
2.51
|
|
$
10.91
|
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SOURCE LP Building Solutions