LP Reports Second Quarter 2020 Results and Announces Quarterly Dividend

NASHVILLE, Tenn.--()--Louisiana-Pacific Corporation (LP) (NYSE: LPX) today reported its financial results for the three and six months ended June 30, 2020.

Key Highlights for the Second Quarter

  • Total net sales decreased by seven percent to $548 million
    • LP® SmartSide® strand revenue increased by four percent to $207 million
    • OSB segment revenue increased by three percent to $204 million - 16% lower volume offset by 22% higher prices
    • EWP segment revenue decreased by $28 million
    • The strategic exit of SmartSide fiber and CanExel® decreased net sales by $14 million and $4 million, respectively
  • Net income attributed to LP increased by 94% to $33 million ($0.29 per diluted share)
  • Adjusted Diluted EPS(1) increased by $0.32 to $0.43 per share
  • Adjusted EBITDA(1) increased by $44 million to $97 million, including $37 million due to increased OSB prices
  • Cash flow from operating activities of $129 million
  • LP announces a quarterly cash dividend of $0.145 per share

(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.

“This was a transformative quarter for LP,” said LP Chief Executive Officer Brad Southern. “The Siding segment completed its strategic exit from fiber and demonstrated the value of deeper relationships with our retail customers. The OSB segment achieved outstanding cost of production despite a volatile production schedule. As the housing sector rebounded sharply in the second quarter, LP’s growing product diversity and customer breadth positioned us well to participate in the recovery. As demand accelerated through May and June, LP’s agility and strategic focus generated EBITDA and EPS growth despite significant downtime in April. I am extremely proud of and grateful for the resilience, creativity, and grit of LP’s employees.”

Liquidity Update

  • Cash and cash equivalents of $259 million as of June 30, 2020
  • Completed the sale of CanExel for $14 million in cash proceeds
  • Amended credit facility to expand capacity from $350 million to $550 million
  • Repaid the $350 million of revolving credit drawn in March

"There is still significant uncertainty about the duration of the COVID-19 pandemic, as well as the nature and severity of economic impacts," said LP Chief Financial Officer, Alan Haughie. "However, we remain confident in LP’s ability to preserve liquidity and deliver value as challenges and opportunities arise during the pandemic and beyond."

COVID-19 Response Update

The COVID-19 pandemic and actions taken in response thereto did not materially impact our results of operations for the three and six months ended June 30, 2020. However, the COVID-19 pandemic and actions taken in response thereto are continuing to have a significant adverse effect on many sectors of the economy and the overall financial condition in the United States.

We continue to take the following measures:

  • LP is following national, state, and local guidelines while also continuing to provide LP products to support critical infrastructure needs. Employees able to work from home have continued to do so. We have instituted rigorous cleaning and social distancing protocols as outlined by the Centers for Disease Control and Prevention.
  • LP initially reduced mill operating schedules to balance production and demand but has resumed full operating schedules as of June 30, 2020. However, the duration of the COVID-19 pandemic, the actions to contain the pandemic and mitigate its impacts, and the effects on our operations cannot be reasonably estimated.

SECOND QUARTER OF 2020 RESULTS

Total net sales for the second quarter of 2020 decreased by $40 million over the prior year to $548 million compared to the second quarter of 2019. SmartSide strand revenue increased by $7 million (or four percent) and OSB prices increased by $37 million on 16% lower volume. EWP revenue was lower by $28 million and exiting SmartSide fiber and CanExel reduced net sales by $14 million and $4 million, respectively.

Net income attributed to LP for the second quarter of 2020 increased by $16 million over the prior year to $33 million, or $0.29 per diluted share. In addition to the increase in OSB pricing, wood fiber and resin costs were favorable to the prior year by $6 million. Net income attributed to LP includes $14 million of non-cash exit and impairment charges and $2 million of severance costs related to the discontinuance of SmartSide fiber.

Adjusted Diluted EPS for the second quarter of 2020 was $0.43 per diluted share compared to $0.11 per diluted share in the second quarter of 2019. Adjusted EBITDA for the second quarter of 2020 increased by $44 million over the prior year to $97 million.

FIRST SIX MONTHS OF 2020 RESULTS

Total net sales for the first six months of 2020 decreased by $37 million over the prior year to $1.133 billion compared to the first six months of 2019. SmartSide strand revenue increased by $11 million (or three percent) and OSB prices increased by $56 million on 10% lower volume. EWP revenue was lower by $19 million, South America revenue was impacted by $14 million of unfavorable foreign currency movements, and exiting SmartSide fiber and CanExel reduced net sales by $21 million and $10 million, respectively.

Net income attributed to LP for the first six months of 2020 increased by $22 million over the prior year to $66 million, or $0.58 per diluted share. In addition to the increase in OSB prices, wood fiber and resin costs were favorable to the prior year by $12 million. Net income attributed to LP includes $19 million of non-cash exit and impairment charges and $2 million of severance costs related to the discontinuance of SmartSide fiber.

Adjusted Diluted EPS for the first six months of 2020 was $0.77 per diluted share compared to $0.23 per diluted share in the first six months of 2019. Adjusted EBITDA for the first six months of 2020 increased by $69 million over the prior year to $180 million.

SEGMENT RESULTS

Siding

The Siding segment consists of LP SmartSide Trim & Siding and LP Outdoor Building Solutions® innovative products for premium outdoor buildings. During the six months ended June 30, 2020, LP CanExel prefinished siding was reclassified from Siding to Other, all prior periods presented have been adjusted for comparability.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

Change

 

2020

 

2019

 

Change

Net sales

$

220

 

 

$

231

 

 

(5

)%

 

$

432

 

 

$

450

 

 

(4

)%

Adjusted EBITDA

51

 

 

45

 

 

13

%

 

93

 

 

84

 

 

11

%

Adjusted EBITDA margin

23

%

 

19

%

 

 

 

22

%

 

19

%

 

 

Net sales for the three and six months ended June 30, 2020 decreased by $11 million (or five percent) and by $18 million (or four percent), respectively, compared to the corresponding periods in 2019, primarily due to decreases in sales of SmartSide fiber, partially offset by SmartSide strand volume increases of three percent in both periods.

Adjusted EBITDA increased year over year by $6 million and $9 million, respectively, for the three and six months ended June 30, 2020, primarily due to the increased SmartSide strand revenue, increased production at the Dawson Creek facility after the prior year conversion to SmartSide strand, and sourcing and operational efficiency savings, partially offset by a decrease in SmartSide fiber sales.

Oriented Strand Board (OSB)

The OSB segment manufactures and distributes OSB structural panel products including LP OSB, and Structural Solutions products such as LP TechShield® Radiant Barrier, LP TopNotch® Sub-Flooring, LP Legacy® Premium Sub-Flooring, LP WeatherLogic® Air & Water Barrier, and LP FlameBlock® Fire-Rated Sheathing.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

Change

 

2020

 

2019

 

Change

Net sales

$

204

 

 

$

199

 

 

3

%

 

$

424

 

 

$

407

 

 

4

%

Adjusted EBITDA

46

 

 

(3

)

 

NA

 

81

 

 

5

 

 

NA

Adjusted EBITDA margin

23

%

 

(2

)%

 

 

 

19

%

 

1

%

 

 

 

Net sales increased by $5 million (or three percent) and by $17 million (or four percent) for the three and six months ended June 30, 2020, respectively, compared to the corresponding periods in 2019. OSB prices increased over the prior year by $37 million and $56 million for the three- and six-month periods, partially offset by 16% and 10% lower volumes, respectively. Structural Solutions volumes, as a percentage of total OSB segment volume, were 41% and 42% for the three and six months ended June 30, 2020, respectively, compared to 43% and 42% in the comparable periods of 2019.

Adjusted EBITDA increased over the prior year by $49 million and $76 million for the three and six months ended June 30, 2020, respectively, primarily due to increased prices, lower raw material costs, and cost containment efforts.

Engineered Wood Products (EWP)

The EWP segment consists of LP SolidStart® I-Joist (IJ), Laminated Veneer Lumber (LVL), Laminated Strand Lumber (LSL), and other related products. This segment also includes the sales of I-Joist and LVL products produced by the joint venture and sales of plywood produced as a by-product of the LVL production process.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

Change

 

2020

 

2019

 

Change

Net sales

$

79

 

 

$

107

 

 

(26

)%

 

$

178

 

 

$

197

 

 

(10

)%

Adjusted EBITDA

3

 

 

10

 

 

(70

)%

 

12

 

 

17

 

 

(29

)%

Adjusted EBITDA margin

4

%

 

9

%

 

 

 

7

%

 

9

%

 

 

Net sales decreased by $28 million (or 26%) and by $19 million (or ten percent) and Adjusted EBITDA decreased by $7 million and $5 million for the three and six months ended June 30, 2020, respectively, compared to the corresponding periods in 2019.

South America

Our 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, Columbia, and Argentina.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

Change

 

2020

 

2019

 

Change

Net sales

$

38

 

 

$

40

 

 

(5

)%

 

$

74

 

 

$

85

 

 

(13

)%

Adjusted EBITDA

11

 

 

9

 

 

22

%

 

18

 

 

19

 

 

(5

)%

Adjusted EBITDA margin

29

%

 

23

%

 

 

 

24

%

 

22

%

 

 

Foreign currency changes lowered net sales and Adjusted EBITDA by $8 million and $1 million, respectively, for the three months ended June 30, 2020, compared to 2019. For the six months ended June 30, 2020, foreign currency changes lowered net sales and Adjusted EBITDA by $14 million and $1 million, respectively, compared to 2019. Excluding foreign currency changes, net sales in both the three- and six-month periods increased due to higher OSB and Siding volumes (local and export), partially offset by lower export prices.

2020 Full Year Guidance

LP’s guidance is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks, including those related to the COVID-19 pandemic and set forth below in “Forward-Looking Statements.”

  • LP continues to expect 2020 capital expenditures to be approximately $70 million.
  • LP continues to suspend its SmartSide strand sales growth guidance for the full year 2020 but expects high single digit growth for the third quarter.

About Louisiana-Pacific Corporation

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 worldwide. Its extensive offerings include innovative and dependable building products and accessories, such as the LP Structural Solutions portfolio (LP WeatherLogic® Air & Water Barrier, LP Legacy® Premium Sub-Flooring, LP® TechShield® Radiant Barrier, LP® FlameBlock® Fire-Rated Sheathing and more), oriented strand board (OSB), LP® TopNotch® Sub-Flooring, LP® SmartSide® Trim & Siding, LP® Outdoor Building Solutions®, and LP Elements® Performance Fencing. In addition to product solutions, LP provides industry-leading service and warranties. Since its founding in 1973, LP has been Building a Better World by helping customers construct beautiful, durable homes. Headquartered in Nashville, Tennessee, LP operates 25 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. 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: impacts from public health issues (including global pandemics, such as the COVID-19 pandemic and resulting quarantines) on the economy, demand for our products or our operations, including the responses of governmental authorities to contain such public health issues; changes in governmental fiscal and monetary policies, including tariffs, and levels of employment; changes in general economic conditions, including impacts from the COVID-19 pandemic; changes in the cost and availability of capital; changes in the level of home construction and repair activity; changes in competitive conditions and prices for our products; changes in the relationship between supply of and demand for building products; changes in the financial or business conditions of third-party wholesale distributors and dealers; changes in the relationship between supply of and demand for raw materials, including wood fiber and resins, used in manufacturing our products; changes in the cost of and availability of energy, primarily natural gas, electricity, and diesel fuel; changes in the cost of and availability of transportation; difficulties in the launch or production ramp-up of newly introduced products; unplanned interruptions to our manufacturing operations, such as explosions, fires, inclement weather, natural disasters, accidents, equipment failures, labor 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 general and industry-specific environmental laws and regulations; changes in tax laws, and interpretations thereof; changes in circumstances giving rise to environmental liabilities or expenditures; warranty costs exceeding our warranty reserves; challenge or exploitation of our intellectual property or other proprietary information by others in the industry; changes in the funding requirements of our defined benefit pension plans; the resolution of existing and future product-related litigation and other legal proceedings; 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; and acts of public authorities, war, 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. 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. GAAP. We disclose income attributed to LP before interest expense, provision for income taxes, depreciation and amortization, and exclude stock-based compensation expense, loss on impairment attributed to LP, product-line discontinuance charges, other operating credits and charges, net, loss on early debt extinguishment, investment income, and other non-operating items as Adjusted EBITDA (Adjusted EBITDA) which is a non-GAAP financial measure. We have included Adjusted EBITDA in this news release 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, which excludes loss on impairment attributed to LP product-line discontinuance charges, interest outside of normal operations, other operating credits and charges, net, gain (loss) on acquisition, other non-operating credits and charges, net, and adjusts for a normalized tax rate (Adjusted Income). We also disclose 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 this measure should allow interested persons to more readily compare the earnings for past and future periods.

Neither Adjusted EBITDA, Adjusted Income, nor Adjusted Diluted EPS is a substitute for the U.S. GAAP measure of net income 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 operations of our business.

We have elected to change our definition of Adjusted EBITDA and Adjusted Income to exclude product-line discontinuance charges incurred during the second quarter of 2020. Product-line discontinuance charges consist of inventory and other asset impairment and exit charges related to products no longer offered. We consider product-line discontinuance charges to be outside the performance of our ongoing core business operations and believe that presenting Adjusted EBITDA and Adjusted Income excluding product-line discontinuance charges provides increased transparency as to the operating costs of our current business performance. We did not revise prior years’ Adjusted EBITDA or Adjusted Income amounts because there were no significant costs similar in nature to these items.

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions, except per share amounts) (Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Net sales

$

548

 

 

$

588

 

 

$

1,133

 

 

$

1,170

 

Cost of sales

(431

)

 

(510

)

 

(908

)

 

(1,011

)

Gross profit

117

 

 

78

 

 

225

 

 

159

 

Selling, general, and administrative expenses

(50

)

 

(58

)

 

(105

)

 

(114

)

Loss on impairment

(8

)

 

 

 

(15

)

 

(1

)

Other operating credits and charges, net

(6

)

 

3

 

 

(8

)

 

1

 

Income from operations

53

 

 

23

 

 

97

 

 

45

 

Interest expense

(6

)

 

(4

)

 

(12

)

 

(8

)

Investment income

4

 

 

2

 

 

3

 

 

7

 

Other non-operating items

(1

)

 

(2

)

 

4

 

 

9

 

Income before income taxes

50

 

 

19

 

 

92

 

 

52

 

Provision for income taxes

(19

)

 

(3

)

 

(28

)

 

(11

)

Net income

$

31

 

 

$

16

 

 

$

64

 

 

$

42

 

Net loss attributed to noncontrolling interest

2

 

 

2

 

 

2

 

 

2

 

Net income attributed to LP

$

33

 

 

$

17

 

 

$

66

 

 

$

44

 

 

 

 

 

 

 

 

 

Basic net income per share of common stock:

 

 

 

 

 

 

 

Net income per share - basic

$

0.29

 

 

$

0.14

 

 

$

0.59

 

 

$

0.34

 

Diluted net income per share of common stock:

 

 

 

 

 

 

 

Net income per share - diluted

$

0.29

 

 

$

0.14

 

 

$

0.58

 

 

$

0.34

 

 

 

 

 

 

 

 

 

Average shares of common stock used to compute net income per share:

 

 

 

 

 

 

 

Basic

112

 

 

123

 

 

112

 

 

127

 

Diluted

113

 

 

124

 

 

113

 

 

128

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions) (Unaudited)

 

 

June 30, 2020

 

December 31, 2019

ASSETS

 

 

 

Cash and cash equivalents

$

259

 

 

$

181

 

Receivables, net of allowance for doubtful accounts of $2 million and $1 million at June 30, 2020, and December 31, 2019, respectively

175

 

 

164

 

Inventories

240

 

 

265

 

Prepaid expenses and other current assets

15

 

 

9

 

Total current assets

689

 

 

619

 

 

 

 

 

Timber and timberlands

55

 

 

63

 

Property, plant, and equipment, net

912

 

 

965

 

Operating lease assets

42

 

 

44

 

Goodwill and other intangible assets

48

 

 

53

 

Investments in and advances to affiliates

11

 

 

10

 

Restricted cash

 

 

14

 

Other assets

50

 

 

67

 

Total assets

$

1,807

 

 

$

1,835

 

LIABILITIES AND EQUITY

 

 

 

Accounts payable and accrued liabilities

204

 

 

242

 

Income tax payable

13

 

 

 

Other current liabilities

2

 

 

2

 

Total current liabilities

219

 

 

244

 

 

 

 

 

Long-term debt

348

 

 

348

 

Deferred income taxes

71

 

 

73

 

Non-current operating lease liabilities

33

 

 

36

 

Other long-term liabilities

125

 

 

133

 

Total liabilities

796

 

 

834

 

 

 

 

 

Redeemable noncontrolling interest

11

 

 

10

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock, $1 par value, 200,000,000 shares authorized; 129,665,899 and 112,259,769 shares issued and outstanding, respectively, as of June 30, 2020; and 129,665,899 and 111,945,021 shares issued and outstanding, respectively, as of December 31, 2019

130

 

 

130

 

Additional paid-in capital

446

 

 

454

 

Retained earnings

999

 

 

966

 

Treasury stock, 17,406,130 shares and 17,720,878 shares, at cost as of June 30, 2020, and December 31, 2019, respectively

(400

)

 

(406

)

Accumulated comprehensive loss

(175

)

 

(153

)

Total stockholders’ equity

1,000

 

 

991

 

Total liabilities and stockholders’ equity

$

1,807

 

 

$

1,835

 

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions) (Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income

$

31

 

 

$

16

 

 

$

64

 

 

$

42

 

Adjustments to net income:

 

 

 

 

 

 

 

Depreciation and amortization

28

 

 

29

 

 

56

 

 

60

 

Loss on impairment

8

 

 

 

 

15

 

 

1

 

Gain on acquisition

 

 

 

 

 

 

(14

)

Deferred taxes

5

 

 

(5

)

 

1

 

 

(11

)

Other adjustments, net

15

 

 

 

 

10

 

 

5

 

Changes in assets and liabilities (net of acquisitions and divestitures):

 

 

 

 

 

 

 

Receivables

4

 

 

(6

)

 

(27

)

 

(41

)

Prepaid expenses and other current assets

(4

)

 

(3

)

 

(5

)

 

(3

)

Inventories

38

 

 

19

 

 

2

 

 

(17

)

Accounts payable and accrued liabilities

(6

)

 

(2

)

 

(22

)

 

(17

)

Income taxes payable, net of receivables

10

 

 

4

 

 

26

 

 

(5

)

Net cash provided by operating activities

129

 

 

54

 

 

120

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Property, plant, and equipment additions

(15

)

 

(38

)

 

(39

)

 

(81

)

Proceeds from business divestiture

14

 

 

 

 

14

 

 

 

Redemption of insurance cash surrender value

10

 

 

 

 

10

 

 

 

Cash (used) acquired in acquisition

 

 

(7

)

 

 

 

33

 

Other investing activities

3

 

 

 

 

3

 

 

 

Net cash provided by (used in) investing activities

12

 

 

(45

)

 

(12

)

 

(50

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Repayment of long-term debt

(350

)

 

(3

)

 

(350

)

 

(3

)

Borrowing of long-term debt

 

 

 

 

350

 

 

 

Payment of cash dividends

(17

)

 

(17

)

 

(33

)

 

(33

)

Purchase of stock

 

 

 

 

 

 

(438

)

Other financing activities

(1

)

 

(3

)

 

(6

)

 

(7

)

Net cash used in financing activities

(368

)

 

(22

)

 

(39

)

 

(481

)

EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(2

)

 

1

 

 

(5

)

 

1

 

Net (decrease) increase in cash, cash equivalents and restricted cash

(229

)

 

(13

)

 

64

 

 

(530

)

Cash, cash equivalents, and restricted cash at beginning of period

488

 

 

375

 

 

195

 

 

892

 

Cash, cash equivalents, and restricted cash at end of period

$

259

 

 

$

362

 

 

$

259

 

 

$

362

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
KEY STATISTICS

We monitor housing starts as a leading indicator of demand for many of our products, and we believe that this is a useful measure for evaluating our ability to generate sales and that providing this measure should allow interested persons to more readily compare the earnings for past and future periods. 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.

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Housing starts1:

 

 

 

 

 

 

 

Single-Family

211

 

 

242

 

 

425

 

 

431

 

Multi-Family

79

 

 

111

 

 

194

 

 

184

 

 

290

 

 

353

 

 

619

 

 

615

 

1 Actual U.S. Housing starts data reported by U.S. Census Bureau as published through July 17, 2020.

The following table sets forth North American sales volumes for the three months ended June 30, 2020 and 2019:

 

Three Months Ended June 30, 2020

 

Three Months Ended June 30, 2019

Sales Volume

Siding

OSB

EWP

Total

 

Siding

OSB

EWP

Total

SmartSide® strand siding (MMSF)

319

 

 

 

319

 

 

309

 

 

 

309

 

SmartSide® fiber siding (MMSF)

22

 

 

 

22

 

 

51

 

 

 

51

 

OSB - commodity (MMSF)

 

480

 

 

480

 

 

26

 

549

 

7

 

582

 

OSB - Structural Solutions (MMSF)

 

339

 

 

339

 

 

1

 

420

 

5

 

427

 

LVL (MCF)

 

 

1,534

 

1,534

 

 

 

 

1,968

 

1,968

 

LSL (MCF)

 

 

573

 

573

 

 

 

 

869

 

869

 

I-Joist (MMLF)

 

 

24

 

24

 

 

 

 

26

 

26

 

The following table set forth North American sales volume for the six months ended June 30, 2020, and 2019:

 

Six Months Ended June 30, 2020

 

Six Months Ended June 30, 2019

Sales Volume

Siding

OSB

EWP

Total

 

Siding

OSB

EWP

Total

SmartSide® strand siding (MMSF)

610

 

 

 

610

 

 

593

 

 

 

593

 

SmartSide® fiber siding (MMSF)

60

 

 

 

60

 

 

104

 

 

 

104

 

OSB - commodity (MMSF)

 

1,002

 

 

1,002

 

 

43

 

1,120

 

16

 

1,179

 

OSB - Structural Solutions (MMSF)

 

737

 

 

737

 

 

2

 

810

 

11

 

823

 

LVL (MCF)

 

 

3,292

 

3,292

 

 

 

 

3,481

 

3,481

 

LSL (MCF)

 

 

1,272

 

1,272

 

 

 

 

1,666

 

1,666

 

I-Joist (MMLF)

 

 

50

 

50

 

 

 

 

45

 

45

 

We measure the Overall Equipment Effectiveness (OEE) at 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. The OEE for the three and six months ended June 30, 2020 and 2019 for each of our segments is listed below:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

 

2019

 

2020

 

2019

Siding

88

%

 

87

%

 

88

%

 

86

%

OSB

90

%

 

87

%

 

89

%

 

87

%

EWP

93

%

 

87

%

 

91

%

 

86

%

South America

71

%

 

77

%

 

70

%

 

77

%

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

SELECTED SEGMENT INFORMATION

(Dollar amounts in millions) (Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2020

 

2019

 

2020

 

2019

Net sales

 

 

 

 

 

 

 

Siding

$

220

 

 

$

231

 

 

$

432

 

 

$

450

 

OSB

204

 

 

199

 

 

424

 

 

407

 

EWP

79

 

 

107

 

 

178

 

 

197

 

South America

38

 

 

40

 

 

74

 

 

85

 

Other

7

 

 

14

 

 

25

 

 

35

 

Intersegment sales

 

 

(3

)

 

 

 

(4

)

Total sales

$

548

 

 

$

588

 

 

$

1,133

 

 

$

1,170

 

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA, NON-GAAP ADJUSTED INCOME, AND NON-GAAP DILUTED EPS

(Dollar amounts in millions, except per share amounts) (Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2020

 

2019

 

2020

 

2019

Net income

$

31

 

 

$

16

 

 

$

64

 

 

$

42

 

Add (deduct):

 

 

 

 

 

 

 

Net loss attributed to noncontrolling interest

2

 

 

2

 

 

2

 

 

2

 

Income attributed to LP

33

 

 

17

 

 

66

 

 

44

 

Provision for income taxes

19

 

 

3

 

 

28

 

 

11

 

Depreciation and amortization

28

 

 

29

 

 

56

 

 

60

 

Stock-based compensation expense

1

 

 

3

 

 

3

 

 

5

 

Loss on impairment attributed to LP

7

 

 

 

 

14

 

 

1

 

Other operating credits and charges, net

(4

)

 

(3

)

 

(2

)

 

(1

)

Product-line discontinuance charges

10

 

 

 

 

10

 

 

 

Interest expense

6

 

 

4

 

 

12

 

 

8

 

Investment income

(4

)

 

(2

)

 

(3

)

 

(7

)

Other non-operating items

1

 

 

2

 

 

(4

)

 

(9

)

Adjusted EBITDA

$

97

 

 

$

53

 

 

$

180

 

 

$

111

 

Siding

51

 

 

45

 

 

93

 

 

84

 

OSB

46

 

 

(3

)

 

81

 

 

5

 

EWP

3

 

 

10

 

 

12

 

 

17

 

South America

11

 

 

9

 

 

18

 

 

19

 

Other

(5

)

 

(1

)

 

(8

)

 

 

Corporate

(9

)

 

(7

)

 

(16

)

 

(14

)

Adjusted EBITDA

97

 

 

53

 

 

180

 

 

111

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2020

 

2019

 

2020

 

2019

Net income

$

31

 

 

$

16

 

 

$

64

 

 

$

42

 

Add (deduct):

 

 

 

 

 

 

 

Net loss attributed to noncontrolling interest

2

 

 

2

 

 

2

 

 

2

 

Income attributed to LP

33

 

 

17

 

 

66

 

 

44

 

Loss on impairment attributed to LP

7

 

 

 

 

14

 

 

1

 

Other operating credits and charges, net

(4

)

 

(3

)

 

(2

)

 

(1

)

Product-line discontinuance

10

 

 

 

 

10

 

 

 

Gain on acquisition of controlling interest

 

 

 

 

 

 

(14

)

Reported tax provision

19

 

 

3

 

 

28

 

 

11

 

Adjusted income before tax

65

 

 

17

 

 

116

 

 

40

 

Normalized tax provision at 25%

(16

)

 

(5

)

 

(29

)

 

(10

)

Adjusted Income

$

49

 

 

$

12

 

 

$

87

 

 

$

30

 

Diluted shares outstanding

113

 

 

124

 

 

113

 

 

128

 

Adjusted Diluted EPS

$

0.43

 

 

$

0.11

 

 

$

0.77

 

 

$

0.23

 

 

Contacts

LP Investor Relations
Aaron Howald
615.986.5792
Aaron.Howald@lpcorp.com

LP Media Contact
Breeanna Straessle
615.986.5886
Breeanna.Straessle@lpcorp.com

Release Summary

Louisiana-Pacific Corp. (NYSE: LPX) today reported its financial results for the three months ended June 30, 2020 and declared a quarterly dividend.

Contacts

LP Investor Relations
Aaron Howald
615.986.5792
Aaron.Howald@lpcorp.com

LP Media Contact
Breeanna Straessle
615.986.5886
Breeanna.Straessle@lpcorp.com