LP Reports Second Quarter 2018 Results
-
Net sales for the second quarter of
$811 million were higher by 17 percent compared to the year ago quarter. -
Income from continuing operations was
$163 million ($1.11 per diluted share). -
Non-GAAP adjusted income from continuing operations was
$157 million ($1.08 per diluted share). -
Adjusted EBITDA from continuing operations for the second quarter was
$242 million . -
Deployed approximately
$39 million in cash to repurchase 1.4 million shares during the second quarter.
“Our strong results this quarter demonstrate clear progress against our
strategy to transform
SECOND QUARTER RESULTS
For the second quarter of 2018, LP reported net sales of
YEAR TO DATE RESULTS
For the six months ended
SIDING SEGMENT
The Siding segment consists of LP SmartSide® siding as well as LP’s
prefinished CanExel® siding line and a minor amount of OSB. These
products are used in new construction, repair and remodeling and
non-residential markets. The Siding segment reported net sales of
For the first six months, Siding reported sales of
ORIENTED STRAND BOARD (OSB) SEGMENT
The OSB segment manufactures and distributes OSB structural panel
products. The OSB segment reported net sales of
For the first six months, OSB reported sales of
ENGINEERED WOOD PRODUCTS SEGMENT (EWP)
The EWP segment is comprised of I-Joist (IJ), Laminated Veneer Lumber
(LVL) and Laminated Strand Lumber (LSL). EWP reported net sales of
For the first six months, EWP reported sales of
SOUTH AMERICA SEGMENT
The South American segment consists of facilities in
For the first six months,
COMPANY OUTLOOK
“We are well positioned going into the second half of the year to drive profitable growth and value creation,” Southern said. “We are optimistic that our end markets will remain favorable, as builders report that traffic remains very strong even in a rising mortgage rate environment. Looking ahead, we will continue to leverage our strong balance sheet to deploy capital to the highest return opportunities, while continuing to grow our specialty products business.”
FORWARD LOOKING STATEMENTS
This news release contains statements concerning
CONSOLIDATED STATEMENTS OF INCOME |
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Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Net sales | $ | 810.8 | $ | 694.1 | $ | 1,502.1 | $ | 1,305.0 | ||||||||||||||
Cost of sales | 550.2 | 511.8 | 1,064.7 | 994.6 | ||||||||||||||||||
Gross profit | 260.6 | 182.3 | 437.4 | 310.4 | ||||||||||||||||||
Selling, general and administrative expenses | 50.1 | 47.2 | 100.7 | 95.9 | ||||||||||||||||||
Gain on sale or impairment of long lived assets, net | — | (3.1 | ) | (0.6 | ) | (2.5 | ) | |||||||||||||||
Other operating credits and charges, net | (4.5 | ) | 2.0 | (4.9 | ) | 5.4 | ||||||||||||||||
Income from operations | 215.0 | 136.2 | 342.2 | 211.6 | ||||||||||||||||||
Non-operating income (expense): | ||||||||||||||||||||||
Interest expense, net of capitalized interest | (4.4 | ) | (4.9 | ) | (8.8 | ) | (9.9 | ) | ||||||||||||||
Investment income | 4.8 | 2.3 | 8.0 | 4.3 | ||||||||||||||||||
Other non-operating items | (0.7 | ) | (3.1 | ) | (2.1 | ) | (5.0 | ) | ||||||||||||||
Total non-operating income (expense) | (0.3 | ) | (5.7 | ) | (2.9 | ) | (10.6 | ) | ||||||||||||||
Income from continuing operations before taxes and equity in loss of unconsolidated affiliate | 214.7 | 130.5 | 339.3 | 201.0 | ||||||||||||||||||
Provision for income taxes | 51.2 | 36.0 | 80.9 | 51.5 | ||||||||||||||||||
Equity in loss of unconsolidated affiliate | 0.6 | — | 0.6 | — | ||||||||||||||||||
Income from continuing operations | 162.9 | 94.5 | 257.8 | 149.5 | ||||||||||||||||||
Loss from discontinued operations before taxes | (0.3 | ) | — | (5.6 | ) | — | ||||||||||||||||
Benefit for income taxes | (0.1 | ) | — | (1.4 | ) | — | ||||||||||||||||
Loss from discontinued operations | (0.2 | ) | — | (4.2 | ) | — | ||||||||||||||||
Net income | $ | 162.7 | $ | 94.5 | $ | 253.6 | $ | 149.5 | ||||||||||||||
Net income per share of common stock: | ||||||||||||||||||||||
Income from continuing operations | $ | 1.13 | $ | 0.65 | $ | 1.78 | $ | 1.04 | ||||||||||||||
Loss from discontinued operations | — | — | (0.03 | ) | — | |||||||||||||||||
Net income per share - basic | $ | 1.13 | $ | 0.65 | $ | 1.75 | $ | 1.04 | ||||||||||||||
Diluted net income per share of common stock: | ||||||||||||||||||||||
Income from continuing operations | $ | 1.11 | $ | 0.65 | $ | 1.76 | $ | 1.02 | ||||||||||||||
Loss from discontinued operations | — | — | (0.03 | ) | — | |||||||||||||||||
Net income per share - diluted | $ | 1.11 | $ | 0.65 | $ | 1.73 | $ | 1.02 | ||||||||||||||
Weighted average shares of stock outstanding - basic | 144.6 | 144.5 | 144.7 | 144.3 | ||||||||||||||||||
Weighted average shares of stock outstanding - diluted | 146.2 | 146.2 | 146.4 | 146.0 |
CONSOLIDATED BALANCE SHEETS |
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June 30, 2018 | December 31, 2017 | |||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 1,000.9 | $ | 928.0 | ||||||||||
Receivables, net of allowance for doubtful accounts of $0.9 million at June 30, 2018 and December 31, 2017 | 162.3 | 142.5 | ||||||||||||
Inventories | 286.4 | 259.1 | ||||||||||||
Prepaid expenses and other current assets | 13.0 | 7.8 | ||||||||||||
Current portion of notes receivable from asset sales | — | 22.2 | ||||||||||||
Total current assets | 1,462.6 | 1,359.6 | ||||||||||||
Timber and timberlands | 56.0 | 55.7 | ||||||||||||
Property, plant and equipment, net | 946.6 | 926.1 | ||||||||||||
Goodwill and other intangible assets | 26.4 | 26.7 | ||||||||||||
Investments in and advances to affiliates | 53.9 | 7.8 | ||||||||||||
Restricted cash | 13.3 | 13.3 | ||||||||||||
Other assets | 59.5 | 56.8 | ||||||||||||
Deferred tax asset | 2.5 | 2.5 | ||||||||||||
Total assets | $ | 2,620.8 | $ | 2,448.5 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current portion of long-term debt | $ | 27.3 | $ | 25.1 | ||||||||||
Accounts payable and accrued liabilities | 211.1 | 237.1 | ||||||||||||
Income taxes payable | 15.7 | 4.5 | ||||||||||||
Current portion of contingency reserves | 3.4 | 3.4 | ||||||||||||
Total current liabilities | 257.5 | 270.1 | ||||||||||||
Long-term debt, excluding current portion | 348.4 | 350.8 | ||||||||||||
Deferred income taxes | 58.9 | 33.4 | ||||||||||||
Contingency reserves, excluding current portion | 9.4 | 11.7 | ||||||||||||
Other long-term liabilities | 180.8 | 178.0 | ||||||||||||
Stockholders’ equity: | ||||||||||||||
Common stock | 153.4 | 153.4 | ||||||||||||
Additional paid-in capital | 457.5 | 470.6 | ||||||||||||
Retained earnings | 1,508.4 | 1,280.1 | ||||||||||||
Treasury stock | (206.2 | ) | (177.5 | ) | ||||||||||
Accumulated comprehensive loss | (147.3 | ) | (122.1 | ) | ||||||||||
Total stockholders’ equity | 1,765.8 | 1,604.5 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 2,620.8 | $ | 2,448.5 |
CONSOLIDATED CASH FLOW STATEMENT |
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Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||
Net income | $ | 162.7 | $ | 94.5 | $ | 253.6 | $ | 149.5 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||
Depreciation and amortization | 30.1 | 29.6 | 61.1 | 60.2 | ||||||||||||||||||
Equity in (income) loss of unconsolidated affiliates, including dividends | (0.3 | ) | (0.4 | ) | (1.1 | ) | (1.0 | ) | ||||||||||||||
Gain on sale or impairment of long-lived assets, net | — | (3.1 | ) | (0.6 | ) | (2.5 | ) | |||||||||||||||
Other operating credits and charges, net | (0.3 | ) | 2.0 | (0.7 | ) | 5.4 | ||||||||||||||||
Stock-based compensation related to stock plans | 2.6 | 1.9 | 4.8 | 6.0 | ||||||||||||||||||
Exchange loss on remeasurement | 0.1 | 1.5 | — | 1.7 | ||||||||||||||||||
Cash settlements of warranties, net of accruals | (0.6 | ) | (2.4 | ) | (1.5 | ) | (5.6 | ) | ||||||||||||||
Cash settlements of contingencies, net of accruals | (5.3 | ) | (0.3 | ) | (1.5 | ) | (0.3 | ) | ||||||||||||||
Pension contributions, net of expense | (2.1 | ) | (2.1 | ) | (0.5 | ) | (0.7 | ) | ||||||||||||||
Other adjustments, net | (1.2 | ) | (0.2 | ) | 0.7 | 0.2 | ||||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||||
Increase in receivables | (16.2 | ) | (5.1 | ) | (45.4 | ) | (44.8 | ) | ||||||||||||||
(Increase) decrease in inventories | 40.6 | 37.8 | (13.4 | ) | 13.0 | |||||||||||||||||
Increase in prepaid expenses | (4.0 | ) | (2.7 | ) | (5.2 | ) | (3.3 | ) | ||||||||||||||
Increase (decrease) in accounts payable and accrued liabilities | 18.5 | 14.6 | (19.5 | ) | (5.3 | ) | ||||||||||||||||
Increase (decrease) in income taxes | 12.7 | (24.8 | ) | 37.2 | (10.9 | ) | ||||||||||||||||
Net cash provided by operating activities | 237.3 | 140.8 | 268.0 | 161.6 | ||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||
Property, plant and equipment additions | (44.4 | ) | (19.6 | ) | (87.6 | ) | (45.7 | ) | ||||||||||||||
Proceeds from sales of assets | 0.1 | 3.2 | 0.9 | 3.2 | ||||||||||||||||||
Investments in unconsolidated affiliate | (45.0 | ) | — | (45.0 | ) | — | ||||||||||||||||
Payment of long-term deposit | — | (32.0 | ) | — | (32.0 | ) | ||||||||||||||||
Receipt of proceeds from notes receivable from asset sales | 22.2 | — | 22.2 | — | ||||||||||||||||||
Other investing activities | (0.1 | ) | — | (0.3 | ) | 0.2 | ||||||||||||||||
Net cash used in investing activities | (67.2 | ) | (48.4 | ) | (109.8 | ) | (74.3 | ) | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||
Repayment of long-term debt | (0.2 | ) | (0.1 | ) | (0.3 | ) | (1.3 | ) | ||||||||||||||
Payment of cash dividends | (18.7 | ) | — | (37.6 | ) | — | ||||||||||||||||
Purchase of treasury stock | (38.9 | ) | — | (38.9 | ) | — | ||||||||||||||||
Sale of common stock, net of cash payments under equity plans | — | (0.8 | ) | 0.1 | (0.4 | ) | ||||||||||||||||
Taxes paid related to net share settlement of equity awards | (2.1 | ) | (0.1 | ) | (7.8 | ) | (4.8 | ) | ||||||||||||||
Other financing activities | — | — | 3.1 | — | ||||||||||||||||||
Net cash used in financing activities | (59.9 | ) | (1.0 | ) | (81.4 | ) | (6.5 | ) | ||||||||||||||
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (5.1 | ) | (0.8 | ) | (3.9 | ) | (0.1 | ) | ||||||||||||||
Net increase in cash, cash equivalents and restricted cash | 105.1 | 90.6 | 72.9 | 80.7 | ||||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 909.1 | 662.6 | 941.3 | 672.5 | ||||||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,014.2 | $ | 753.2 | $ | 1,014.2 | $ | 753.2 |
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES |
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Quarter Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Net sales: | ||||||||||||||||||||||
Siding | $ | 261.6 | $ | 231.0 | $ | 488.6 | $ | 445.0 | ||||||||||||||
OSB | 387.4 | 325.0 | 700.7 | 593.4 | ||||||||||||||||||
EWP | 109.1 | 94.2 | 209.8 | 176.3 | ||||||||||||||||||
South America | 45.3 | 38.7 | 87.7 | 76.5 | ||||||||||||||||||
Other | 7.4 | 7.1 | 15.3 | 15.8 | ||||||||||||||||||
Intersegment sales | — | (1.9 | ) | — | (2.0 | ) | ||||||||||||||||
$ | 810.8 | $ | 694.1 | $ | 1,502.1 | $ | 1,305.0 | |||||||||||||||
Operating profit (loss): | ||||||||||||||||||||||
Siding | $ | 62.7 | $ | 49.0 | $ | 108.0 | $ | 89.7 | ||||||||||||||
OSB | 157.4 | 103.0 | 254.8 | 163.8 | ||||||||||||||||||
EWP | 8.6 | 5.3 | 11.4 | 6.1 | ||||||||||||||||||
South America | 9.6 | 5.5 | 18.5 | 10.6 | ||||||||||||||||||
Other | (0.8 | ) | (0.9 | ) | (1.7 | ) | (1.1 | ) | ||||||||||||||
Other operating credits and charges, net | 4.5 | (2.0 | ) | 4.9 | (5.4 | ) | ||||||||||||||||
Gain on sale or impairment of long-lived assets, net | — | 3.1 | 0.6 | 2.5 | ||||||||||||||||||
General corporate and other expenses, net | (27.6 | ) | (26.8 | ) | (54.9 | ) | (54.6 | ) | ||||||||||||||
Interest expense, net of capitalized interest | (4.4 | ) | (4.9 | ) | (8.8 | ) | (9.9 | ) | ||||||||||||||
Investment income | 4.8 | 2.3 | 8.0 | 4.3 | ||||||||||||||||||
Other non-operating items | (0.7 | ) | (3.1 | ) | (2.1 | ) | (5.0 | ) | ||||||||||||||
Income from continuing operations before taxes | 214.1 | 130.5 | 338.7 | 201.0 | ||||||||||||||||||
Provision for income taxes | 51.2 | 36.0 | 80.9 | 51.5 | ||||||||||||||||||
Income from continuing operations | $ | 162.9 | $ | 94.5 | $ | 257.8 | $ | 149.5 |
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES |
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Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
Housing starts1: | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||||||||||
Single Family | 257.9 | 237.3 | 452.7 | 418.7 | |||||||||||||||||||||||||||||||||||||||||||
Multi-Family | 94.9 | 89.8 | 188.6 | 175.6 | |||||||||||||||||||||||||||||||||||||||||||
352.8 | 327.1 | 641.3 | 594.3 | ||||||||||||||||||||||||||||||||||||||||||||
1 Actual U.S. Housing starts data reported by U.S. Census Bureau |
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The following table sets forth sales volumes for the quarter and six months ended June 30, 2018 and 2017. |
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Quarter Ended June 30, 2018 | Quarter Ended June 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||
Sales Volume |
Siding |
OSB |
EWP |
Total |
Siding |
OSB |
EWP |
Total |
|||||||||||||||||||||||||||||||||||||||
SmartSide® Strand siding (MMSF) | 308.6 | — | — | 308.6 | 269.4 | — | — | 269.4 | |||||||||||||||||||||||||||||||||||||||
SmartSide® fiber siding (MMSF) | 57.7 | — | — | 57.7 | 65.8 | — | — | 65.8 | |||||||||||||||||||||||||||||||||||||||
CanExel® siding (MMSF) | 12.1 | — | — | 12.1 | 14.7 | — | — | 14.7 | |||||||||||||||||||||||||||||||||||||||
OSB - commodity (MMSF) | 34.4 | 662.6 | 13.9 | 710.9 | 76.7 | 684.9 | 14.9 | 776.5 | |||||||||||||||||||||||||||||||||||||||
OSB - value added (MMSF) | 31.1 | 399.8 | 11.0 | 441.9 | — | 415.7 | 11.0 | 426.7 | |||||||||||||||||||||||||||||||||||||||
LVL (MMCF) | — | — | 1.9 | 1.9 | — | — | 2.0 | 2.0 | |||||||||||||||||||||||||||||||||||||||
LSL (MMCF) | — | — | 1.1 | 1.1 | — | — | 0.8 | 0.8 | |||||||||||||||||||||||||||||||||||||||
I-joist (MMLF) | — | — | 21.7 | 21.7 | — | — | 23.2 | 23.2 | |||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2018 | Six Months Ended June 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||
Sales Volume |
Siding |
OSB |
EWP |
Total |
Siding |
OSB |
EWP |
Total |
|||||||||||||||||||||||||||||||||||||||
SmartSide® Strand siding (MMSF) | 571.4 | — | — | 571.4 | 534.0 | — | — | 534.0 | |||||||||||||||||||||||||||||||||||||||
SmartSide® fiber siding (MMSF) | 113.3 | — | — | 113.3 | 132.2 | — | — | 132.2 | |||||||||||||||||||||||||||||||||||||||
CanExel® siding (MMSF) | 24.9 | — | — | 24.9 | 28.8 | — | — | 28.8 | |||||||||||||||||||||||||||||||||||||||
OSB - commodity (MMSF) | 65.0 | 1,278.5 | 25.3 | 1,368.8 | 126.2 | 1,287.2 | 19.5 | 1,432.9 | |||||||||||||||||||||||||||||||||||||||
OSB - value added (MMSF) | 57.6 | 783.2 | 20.7 | 861.5 | — | 805.2 | 20.0 | 825.2 | |||||||||||||||||||||||||||||||||||||||
LVL (MMCF) | — | — | 3.8 | 3.8 | — | — | 3.8 | 3.8 | |||||||||||||||||||||||||||||||||||||||
LSL (MMCF) | — | — | 2.0 | 2.0 | — | — | 1.6 | 1.6 | |||||||||||||||||||||||||||||||||||||||
I-joist (MMLF) | — | — | 45.5 | 45.5 | — | — | 43.2 | 43.2 | |||||||||||||||||||||||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180807005175/en/
Source:
Louisiana-Pacific Corporation
Media Relations:
Mark Morrison,
615-986-5886
or
Investor Relations:
Becky Barckley/Mike
Kinney, 615-986-5600