Louisiana-Pacific Corporation (LP) (NYSE: LPX) today reported
its financial results for the fourth quarter and year ended
December 31, 2023.
Key Highlights for the Fourth Quarter of 2023, Compared to
the Fourth Quarter of the Prior Year
- Siding net sales decreased by 14% to $332 million on lower
volumes partially offset by higher prices
- Oriented Strand Board (OSB) net sales increased by 6% to $272
million
- Consolidated net sales decreased by 7% to $658 million
- Net income was $59 million, an increase of $69 million
- Net income per diluted share was $0.81 per share, an increase
of $0.92 per share
- Adjusted EBITDA(1) was $129 million, an increase of $29
million
- Adjusted Diluted EPS(1) was $0.71 per diluted share, an
increase of $0.10 per diluted share
- Cash provided by operating activities was $159 million
Key Highlights for the Full Year, Compared to Prior
Year
- Siding net sales decreased by 10% to $1.3 billion
- OSB net sales decreased by 50% to $1.0 billion
- Consolidated net sales decreased by 33% to $2.6 billion
- Net income was $178 million, a decrease of $905 million
- Net income per diluted share was $2.46 per share, a decrease of
$11.41 per share
- Adjusted EBITDA(1) was $478 million, a decrease of $911
million
- Adjusted Diluted EPS(1) was $3.22 per diluted share, a decrease
of $8.55 per diluted share
- Cash provided by operating activities was $316 million
(1)
This is a non-GAAP financial measure. See
“Use of Non-GAAP Information” and “Reconciliation of Net Income to
Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income, and Non-GAAP
Adjusted Diluted EPS" below.
Capital Allocation Update
- Paid $300 million in capital expenditures in 2023
- Paid $80 million for facility assets in Wawa, Ontario, Canada
in 2023
- Paid $69 million in cash dividends in 2023
- Declared a quarterly cash dividend of $0.26 per share
- Cash and cash equivalents of $222 million and borrowing
availability under revolving credit facility of $550 million as of
December 31, 2023, resulting in total liquidity of approximately
$770 million
- Availability of $200 million remaining under the share
repurchase program authorized in May 2022
“LP finished the quarter and the year with results that reflect
increased operational efficiency and an improving outlook for
single-family housing,” said LP Chairperson and Chief Executive
Officer Brad Southern. “Siding inventory and sell-through patterns
remain seasonally normal. As we look forward to 2024 and beyond,
LP’s recent investments in mill and prefinishing capacity leave us
well positioned for expansion and share gains in Siding and
Structural Solutions.”
Q1 and Full Year 2024 Outlook
The Company is providing financial guidance for the first
quarter of 2024 and full year 2024 as set forth in the table below.
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.”
First Quarter 2024
Full Year 2024
Siding Net sales year-over-year growth
3% to 5%
8% to 10%
Siding Adjusted EBITDA(2)
$65 million to $70 million
$280 million to $300 million
OSB Adjusted EBITDA(2)(3)
$65 million to $75 million
$215 million to $225 million
Consolidated Adjusted EBITDA(2)(3)(4)
$130 million to $145 million
$495 million to $525 million
Capital Expenditures(5)
$200 million to $220 million
(2)
This is a non-GAAP financial measure.
Reconciliation of Siding Adjusted EBITDA, OSB Adjusted EBITDA, and
consolidated Adjusted EBITDA guidance to the closest corresponding
GAAP measure on a forward-looking basis is not available without
unreasonable efforts. Our inability to reconcile these measures
results from the inherent difficulty in forecasting generally and
quantifying certain projected amounts that are necessary for such
reconciliation. In particular, sufficient information is not
available to calculate certain adjustments required for such
reconciliation, 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 U.S. GAAP measures. The Company expects that
these adjustments may potentially have a significant impact on
future GAAP financial results.
(3)
For purposes of calculating the full year
2024 OSB Adjusted EBITDA and full year 2024 consolidated Adjusted
EBITDA amounts in the table above, the second quarter through the
fourth quarter of 2024 Adjusted EBITDA is assumed to be at our
cycle average run rate of $200 million per year.
(4)
For purposes of calculating the fourth
quarter of 2024 and full year 2024 consolidated Adjusted EBITDA, LP
South America Adjusted EBITDA fully offsets Corporate and Other
Adjusted EBITDA.
(5)
Capital expenditures related to strategic
growth and sustaining maintenance projects are expected to be
between $50 million to $60 million and $150 million to $160
million, respectively.
Fourth Quarter 2023 Highlights
Net sales for the fourth quarter of 2023 decreased
year-over-year by $47 million (or 7%) to $658 million. Siding
revenue decreased $54 million (or 14%), due to 15% lower volumes
partially offset by 1% higher prices. OSB net sales increased $16
million (or 6%), driven by 9% higher prices partially offset by 3%
lower volumes. The LP South America (LPSA) segment revenues
increased year-over-year by $1 million and Other revenues decreased
year-over-year by $10 million.
Net income increased year-over-year by $69 million to $59
million ($0.81 per diluted share) primarily due to an increase in
Adjusted EBITDA of $29 million (or 29%) and the non-recurrence of a
non-cash, pre-tax pension settlement charge of $78 million in the
fourth quarter of 2022, partially offset by an $18 million increase
in the provision for income taxes. The year-over-year increase in
Adjusted EBITDA includes $17 million due to higher OSB selling
prices and a $13 million decrease in inflationary costs (including
freight, raw materials, and labor).
Full Year 2023 Highlights
Net sales for 2023 decreased year-over-year by $1,273 million
(or 33%) to $2,581 million. OSB revenue decreased $1,036 million
due to 40% lower prices and 18% lower volumes. Siding revenue
decreased $141 million (or 10%), due to 14% lower volumes,
partially offset by 5% higher prices. The LPSA segment and Other
revenues decreased year-over-year by $36 million and $61 million,
respectively.
Net income decreased year-over-year by $905 million (or 84%) to
$178 million ($2.46 per diluted share) primarily due to a decrease
in Adjusted EBITDA of $911 million (or 66%) and a decrease in
income from discontinued operations, net of income taxes of $198
million, partially offset by a $200 million decrease in the
provision for income taxes. The decrease in Adjusted EBITDA
includes $793 million due to lower OSB selling prices, a decrease
in OSB sales volumes of $87 million, and a reduction in Siding
sales volumes of $95 million, partially offset by an increase in
Siding average selling prices of $52 million.
Segment Results
Siding
The Siding segment serves diverse end markets with a broad
product offering, including LP® SmartSide® Trim & Siding, LP®
SmartSide® ExpertFinish® Trim & Siding, LP BuilderSeries® Lap
Siding, and LP® Outdoor Building Solutions™ (collectively referred
to as Siding Solutions). The Siding Solutions products consist of a
full line of engineered wood siding, trim, soffit, and fascia.
Segment sales and adjusted EBITDA for this segment were as
follows (dollar amounts in millions):
Quarter Ended December
31,
Year Ended December
31,
2023
2022
% Change
2023
2022
% Change
Net sales
$
332
$
386
(14
)%
$
1,328
$
1,469
(10
)%
Adjusted EBITDA
72
88
(19
)%
269
339
(21
)%
Quarter Ended December 31,
2023 versus 2022
Year Ended December 31, 2023
versus 2022
Average Net Selling Price
Unit Shipments
Average Net Selling Price
Unit Shipments
Siding Solutions
1
%
(15
)%
5
%
(14
)%
The effects of list price increase drove year-over-year
increases in the average net selling price for the fourth quarter
and full year 2023. The volume decreases for the fourth quarter and
full year 2023 were driven by record results in the comparable
period and challenging new and existing home sales markets in the
current period.
Fourth quarter 2023 Adjusted EBITDA decreased year-over-year by
$17 million, reflecting the net impact of lower volumes, partially
offset by higher average selling prices, a $7 million decrease in
Siding mill capacity investments, and a $6 million decrease in
inflationary costs including freight, raw materials, and labor.
Full year 2023 Adjusted EBITDA decreased year-over-year by $70
million, which reflects the net impact of lower volumes, a $10
million decrease in Siding mill capacity investments, a $10 million
increase in operational support costs, and a $5 million press
rebuild, partially offset by higher average selling prices.
Oriented Strand Board (OSB)
The OSB segment manufactures and distributes OSB structural
panel products, including the innovative value-added OSB product
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):
Quarter Ended December
31,
Year Ended December
31,
2023
2022
% Change
2023
2022
% Change
Net sales
$
272
$
257
6
%
$
1,026
$
2,062
(50
)%
Adjusted EBITDA
59
13
362
%
220
1,034
(79
)%
Quarter Ended December 31,
2023 versus 2022
Year Ended December 31, 2023
versus 2022
Average Net
Selling Price
Unit
Shipments
Average Net
Selling Price
Unit
Shipments
OSB - Structural Solutions
(1
)%
35
%
(41
)%
(14
)%
OSB - Commodity
12
%
(25
)%
(39
)%
(22
)%
Fourth quarter 2023 net sales increased year-over-year $16
million (or 6%), reflecting a $17 million increase in revenue due
to higher OSB selling prices. Full year 2023 net sales decreased
year-over-year by $1,036 million (or 50%) including a $793 million
decrease in revenue due to lower average selling prices and a $217
million decrease in sales volumes, including $112 million of lower
production volume from the conversion of the Sagola mill to siding
production.
Adjusted EBITDA for fourth quarter of 2023 increased
year-over-year by $46 million primarily due to higher commodity
selling prices, a $7 million decrease in inflationary costs
including freight, raw materials, and labor, and a $7 million
decrease in mill-related costs. Full year 2023 Adjusted EBITDA
decreased year-over-year by $814 million primarily due to the lower
average selling prices.
LPSA
The LPSA segment manufactures and distributes LP OSB structural
panel and Siding Solutions products in South America and certain
export markets. This segment also sells and distributes a variety
of companion products to support the region’s transition to wood
frame construction. The LPSA segment carries out manufacturing
operations in 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):
Quarter Ended December
31,
Year Ended December
31,
2023
2022
% Change
2023
2022
% Change
Net sales
$
52
$
51
3
%
$
205
$
241
(15
)%
Adjusted EBITDA
11
12
(10
)%
42
77
(46
)%
Quarter Ended December 31,
2023 versus 2022
Year Ended December 31, 2023
versus 2022
Average Net Selling Price
Unit Shipments
Average Net Selling Price
Unit Shipments
OSB - Structural Solutions
(10
)%
15
%
(9
)%
(9
)%
Siding
(2
)%
12
%
7
%
(1
)%
LPSA net sales for the fourth quarter of 2023 increased $1
million year-over-year on higher volumes offset by lower average
selling prices. Net sales for full year 2023 decreased
year-over-year by $36 million driven by lower OSB sales volumes and
average selling prices.
Adjusted EBITDA for the fourth quarter of 2023 decreased
year-over-year by $1 million, reflecting the net impact of lower
average selling prices, higher volumes, and lower inflationary
costs. Full year 2023 Adjusted EBITDA decreased year-over year by
$36 million, reflecting the lower sales volumes and average selling
prices, unfavorable foreign currency impacts of $6 million, 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. 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 products that meet the demands of
builders, remodelers and homeowners worldwide. LP's extensive
portfolio of innovative and dependable products includes Siding
Solutions (LP® SmartSide® Trim & Siding, LP® SmartSide®
ExpertFinish® Trim & Siding, LP BuilderSeries® Lap Siding and
LP® Outdoor Building Solutions™), 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 stockholders
build lasting value. Headquartered in Nashville, Tennessee, LP
operates 23 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. The following statements are or may constitute
forward-looking statements: (1) statements preceded by, followed by
or that include words like “may,” “will,” “could,” “should,”
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,”
“project,” “target,” “potential,” “continue,” “likely,” or “future”
or the negative or other variations thereof and (2) other
statements regarding matters that are not historical facts,
including without limitation, plans for product development,
forecasts of future costs and expenditures, possible outcomes of
legal proceedings, capacity expansion, and other growth
initiatives, the adequacy of reserves for loss contingencies, and
any statements regarding the Company's financial outlook. 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 new or ongoing military conflicts including the
conflict between Russia and Ukraine and the conflict in Israel and
the surrounding areas; the commodity nature of a segment of our
products and the prices for those products, which are determined in
significant part by external factors such as total industry
capacity and wider industry cycles affecting supply and demand
trends changes in the cost and availability of capital; changes in
the cost and availability of financing for home mortgages; 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 of building
products; 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, including
transportation services provided by third parties; our dependence
on third-party vendors and suppliers for certain goods and services
critical to our business; operational and financial impacts from
manufacturing our products internationally; difficulties in the
development, launch or production ramp-up of new products; our
ability to attract and retain qualified executives, management and
other key employees; the need to formulate and implement effective
succession plans from time to time for key members of our
management team; 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; our
ability to identify and successfully complete and integrate
acquisitions, divestitures, joint ventures, capital investments and
other corporate strategic transactions; 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 global or
regional climate conditions, the impacts of climate change, and
potential government policies adopted in response to such
conditions; 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, Chilean peso, and Argentine 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 our competitors or other third parties; 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 (U.S. 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, product-line discontinuance
charges, business exit 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 from continuing operations (Adjusted
Income). We also disclose Adjusted Diluted EPS from continuing
operations (Adjusted Diluted EPS), 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, 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 year ended December 31, 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)
Quarter Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Net sales
$
658
$
705
$
2,581
$
3,854
Cost of sales
(499
)
(577
)
(1,988
)
(2,355
)
Gross profit
159
128
593
1,498
Selling, general, and administrative
expenses
(66
)
(68
)
(257
)
(264
)
Loss on impairment
(5
)
—
(30
)
(1
)
Other operating credits and charges,
net
1
(1
)
(19
)
16
Income from operations
89
59
287
1,250
Interest expense
(5
)
(2
)
(14
)
(11
)
Investment income
8
6
18
14
Other non-operating items
(26
)
(86
)
(43
)
(97
)
Income (loss) before income
taxes
65
(23
)
248
1,155
Provision for income taxes
(7
)
10
(74
)
(274
)
Equity in unconsolidated affiliate
1
—
3
4
Income (loss) from continuing
operations
59
(12
)
178
885
Income from discontinued operations, net
of income taxes
—
2
—
$
198
Net income (loss)
$
59
$
(11
)
$
178
$
1,083
Net loss attributed to noncontrolling
interest
—
3
—
3
Net income (loss) attributed to
LP
$
59
$
(8
)
$
178
$
1,086
Amounts attributed to LP common
shareholders:
Income (loss) from continuing operations,
net of income taxes
$
59
$
(10
)
$
178
$
888
Income from discontinued operations, net
of income taxes
—
2
—
198
$
59
$
(8
)
$
178
$
1,086
Net income attributed to LP per share
of common stock:
Income (loss) per share continuing
operations - basic
$
0.81
$
(0.14
)
$
2.47
$
11.40
Income per share discontinued operations -
basic
—
0.03
—
2.54
Net income (loss) per share -
basic
$
0.81
$
(0.11
)
$
2.47
$
13.94
Income (loss) per share continuing
operations - diluted
$
0.81
$
(0.14
)
$
2.46
$
11.34
Income per share discontinued operations -
diluted
—
0.03
—
2.52
Net income (loss) per share -
diluted
$
0.81
$
(0.11
)
$
2.46
$
13.87
Average shares of common stock used to
compute net income per share:
Basic
72
72
72
78
Diluted
72
72
72
78
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
LOUISIANA-PACIFIC CORPORATION AND
SUBSIDIARIES
(DOLLAR AMOUNTS IN MILLIONS)
December 31,
2023
2022
ASSETS
Cash and cash equivalents
$
222
$
369
Receivables
155
127
Inventories
378
337
Prepaid expenses and other current
assets
23
20
Total current assets
778
854
Timber and timberlands
32
40
Property, plant, and equipment, net
1,540
1,326
Operating lease assets, net
25
44
Goodwill and other intangible assets
27
36
Investments in and advances to
affiliates
5
6
Restricted cash
—
14
Other assets
20
24
Deferred tax asset
11
7
Total assets
$
2,437
$
2,350
LIABILITIES AND EQUITY
Accounts payable and accrued
liabilities
$
254
$
317
Income tax payable
5
19
Total current liabilities
259
336
Long-term debt
347
346
Deferred income taxes
162
113
Non-current operating lease
liabilities
25
41
Contingency reserves, excluding current
portion
25
26
Other long-term liabilities
61
53
Total liabilities
880
916
Stockholders’ equity:
Common stock
88
88
Additional paid-in capital
465
462
Retained earnings
1,479
1,371
Treasury stock
(386
)
(388
)
Accumulated comprehensive loss
(89
)
(99
)
Total stockholders’ equity
1,557
1,433
Total liabilities and stockholders’
equity
$
2,437
$
2,350
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOW (UNAUDITED)
LOUISIANA-PACIFIC CORPORATION AND
SUBSIDIARIES
(DOLLAR AMOUNTS IN MILLIONS)
Quarter Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss)
$
59
$
(11
)
$
178
$
1,083
Adjustments to net income:
Depreciation and amortization
32
33
119
132
Impairment of goodwill and long-lived
assets
5
1
30
1
Gain on sale of assets, net
—
—
(7
)
(157
)
Pension (gain) loss due to settlement
(2
)
78
4
82
Deferred taxes
1
(26
)
44
1
Foreign currency remeasurement and
transaction (gains) losses
29
2
50
(2
)
Other adjustments, net
(2
)
1
26
35
Changes in assets and liabilities (net of
acquisitions and divestitures):
Receivables
44
42
(8
)
22
Inventories
—
6
(46
)
(66
)
Prepaid expenses and other current
assets
4
4
(1
)
(7
)
Accounts payable and accrued
liabilities
(4
)
(25
)
(40
)
15
Income taxes payable, net of
receivables
(7
)
(65
)
(33
)
6
Net cash provided by operating
activities
159
41
316
1,144
CASH FLOWS FROM INVESTING
ACTIVITIES:
Property, plant, and equipment
additions
(64
)
(133
)
(300
)
(414
)
Acquisition of facility assets
—
—
(80
)
—
Proceeds from business divestiture
—
—
—
268
Proceeds from sale of assets
—
3
9
—
Other investing activities, net
—
(3
)
(4
)
—
Net cash used in investing
activities
(64
)
(132
)
(376
)
(146
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayment of long-term debt
—
—
(80
)
—
Borrowing of long-term debt
—
—
80
—
Payment of cash dividends
(17
)
(16
)
(69
)
(69
)
Purchase of stock
—
—
—
(900
)
Other financing activities
2
2
(8
)
(13
)
Net cash used in financing
activities
(15
)
(14
)
(77
)
(982
)
EFFECT OF EXCHANGE RATE ON CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH
(18
)
6
(24
)
(5
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
62
(99
)
(161
)
12
Cash, cash equivalents, and restricted
cash at the beginning of the period
160
482
383
371
Cash, cash equivalents, and restricted
cash at end of period
$
222
$
383
$
222
$
383
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES KEY PERFORMANCE
INDICATORS
The following tables present summary data relating to: (i)
housing starts within the United States, (ii) our sales volumes,
and (iii) our Overall Equipment Effectiveness (OEE) performance. We
consider the following items to be key performance indicators for
our business because LP’s management uses these metrics to evaluate
our business and trends in our industry, measure our performance,
and make strategic decisions. We believe that the key performance
indicators presented may provide additional perspective and
insights when analyzing our core operating performance. 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 financial measures that were prepared in
accordance with accounting principles generally accepted in the
United States of America (U.S. GAAP). 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 quarter
and year ended December 31, 2023 and 2022:
Quarter Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Housing starts1:
Single-Family
236
193
945
1,005
Multi-Family
98
134
469
547
334
327
1,413
1,553
1Actual U.S. housing starts data, in
thousands, reported by U.S. Census Bureau as published through
January 18, 2024.
We monitor sales volumes for our products in our Siding, OSB,
and LPSA 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 volume data differently, and therefore,
as presented by us, sales volume data 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 quarter and
year ended December 31, 2023 and 2022:
Quarter Ended December 31,
2023
Quarter Ended December 31,
2022
Sales Volume
Siding
OSB
LPSA
Total
Siding
OSB
LPSA
Total
Siding Solutions (MMSF)
389
—
8
397
456
—
7
463
OSB - Structural Solutions (MMSF)
—
408
132
540
—
303
115
418
OSB - Commodity (MMSF)
—
375
—
375
—
503
—
503
Year Ended December 31,
2023
Year Ended December 31,
2022
Sales Volume
Siding
OSB
LPSA
Total
Siding
OSB
LPSA
Total
Siding Solutions (MMSF)
1,547
—
33
1,580
1,797
—
33
1,830
OSB - Structural Solutions (MMSF)
—
1,559
502
2,061
—
1,803
554
2,357
OSB - Commodity (MMSF)
—
1,512
—
1,512
—
1,944
—
1,944
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. 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 monitor operational improvements. We
use a best-in-class target across all LP sites that allows us to
optimize capital investments, focus maintenance and reliability
improvements, and improve overall equipment efficiency. It should
be noted that other companies may present OEE data differently, and
therefore, as presented by us, OEE data may not be comparable to
similarly titled measures reported by other companies.
OEE for the quarter and year ended December 31, 2023 and 2022
for each of our segments is listed below:
Quarter Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Siding
77 %
77 %
77 %
76 %
OSB
76 %
71 %
75 %
72 %
LPSA
79 %
70 %
75 %
71 %
LOUISIANA-PACIFIC CORPORATION AND
SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(DOLLAR AMOUNTS IN MILLIONS)
Quarter Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Net sales
Siding
$
332
$
386
$
1,328
$
1,469
OSB
272
257
1,026
2,062
LPSA
52
51
205
241
Other
1
12
22
84
Intersegment sales
—
—
—
(2
)
Total net sales
$
658
$
705
$
2,581
$
3,854
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)
Quarter Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Net income (loss)
$
59
$
(11
)
$
178
$
1,083
Add (deduct):
Net loss attributed to noncontrolling
interest
—
3
—
3
Income from discontinued operations, net
of income taxes
—
(2
)
—
(198
)
Income (loss) attributed to LP from
continuing operations
59
(10
)
178
888
Provision (benefit) for income taxes
7
(10
)
74
274
Depreciation and amortization
32
34
119
129
Stock-based compensation expense
4
3
13
19
Loss on impairment attributed to LP
5
—
6
1
Other operating credits and charges,
net
2
1
18
(16
)
Business exit charges
(3
)
—
32
—
Interest expense
5
2
14
11
Investment income
(8
)
(6
)
(18
)
(14
)
Pension settlement charges
(2
)
78
4
82
Other non-operating items, not included
above
28
8
39
15
Adjusted EBITDA
$
129
$
100
$
478
$
1,389
Siding
$
72
$
88
$
269
$
339
OSB
59
13
220
1,034
LPSA
11
12
42
77
Other
(2
)
(4
)
(17
)
(23
)
Corporate
(10
)
(9
)
(36
)
(38
)
Adjusted EBITDA
$
129
$
100
$
478
$
1,389
Quarter Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Net income attributed to LP from
continuing operations per share - diluted
$
0.81
$
(0.14
)
$
2.46
$
11.34
Net income (loss)
$
59
$
(11
)
$
178
$
1,083
Add (deduct):
Net loss attributed to noncontrolling
interest
—
3
—
3
Income from discontinued operations, net
of income taxes
—
(2
)
—
(198
)
Income (loss) attributed to LP from
continuing operations
59
(10
)
178
888
Loss on impairment attributed to LP
5
—
6
1
Other operating credits and charges,
net
2
1
18
(16
)
Business exit charges
(3
)
—
32
—
Pension settlement charges
(2
)
78
4
82
Reported tax provision (benefit)
7
(10
)
74
274
Adjusted income before tax
68
59
311
1,229
Normalized tax provision at 25%
(17
)
(15
)
(78
)
(307
)
Adjusted Income
$
51
$
44
$
233
$
922
Diluted shares outstanding
72
72
72
78
Adjusted Diluted EPS
$
0.71
$
0.61
$
3.22
$
11.77
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214004077/en/
Investor Contact: Aaron Howald 615.986.5792
Aaron.Howald@lpcorp.com
Media Contact: Breeanna Straessle 615.986.5886
Media.Relations@lpcorp.com
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