LP Reports Third Quarter 2018 Results
-
Net sales for the third quarter of
$737 million were higher by 3 percent compared to the year ago quarter. -
Income from continuing operations was
$124 million ($0.86 per diluted share). -
Non-GAAP adjusted income from continuing operations was
$120 million ($0.83 per diluted share). -
Adjusted EBITDA from continuing operations for the third quarter was
$193 million . -
Deployed approximately
$60 million in cash to repurchase 2.1 million shares during the third quarter.
“We are pleased to report our third quarter results which highlight
solid strategic and operational execution. Against a backdrop of OSB
pricing headwinds, our results continue to validate our strategy to
transform LP into a leading building solutions company and also show the
strength in our value-add and specialty products, including LP
SmartSide® siding and trim,” said
THIRD QUARTER RESULTS
For the third quarter of 2018, LP reported net sales of
YEAR TO DATE RESULTS
For the nine months ended
SIDING SEGMENT
The Siding segment consists of 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 nine 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 nine 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 nine months, EWP reported sales of
SOUTH AMERICA SEGMENT
The South American segment consists of facilities in
For the first nine months,
COMPANY OUTLOOK
“Looking forward, while we are encouraged by the overall fundamentals in housing, we have experienced pricing declines in OSB associated with some recent supply and demand imbalances. To address this, we will continue to adjust our commodity OSB production to reflect changes in demand. We remain confident in our ability to deliver on our commitments to shareholders by returning capital through dividends and share repurchases while prudently operating our assets and investing in key growth opportunities to continue our transition to more value-add and specialty products,” Southern concluded.
About LP
FORWARD LOOKING STATEMENTS
This news release contains statements concerning
CONSOLIDATED STATEMENTS OF INCOME (Dollar amounts in millions, except per share amounts) (Unaudited) |
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Quarter Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Net sales | $ | 736.8 | $ | 718.3 | $ | 2,238.9 | $ | 2,023.3 | |||||||||||
Cost of sales | 524.0 | 507.7 | 1,588.7 | 1,502.3 | |||||||||||||||
Gross profit | 212.8 | 210.6 | 650.2 | 521.0 | |||||||||||||||
Selling, general and administrative expenses | 51.2 | 49.3 | 151.9 | 145.3 | |||||||||||||||
(Gain) loss on sale or impairment of long lived assets, net | 0.3 | 0.7 | (0.3 | ) | (1.8 | ) | |||||||||||||
Other operating credits and charges, net | (6.3 | ) | (0.9 | ) | (11.2 | ) | 4.5 | ||||||||||||
Income from operations | 167.6 | 161.5 | 509.8 | 373.0 | |||||||||||||||
Non-operating income (expense): | |||||||||||||||||||
Interest expense, net of capitalized interest | (3.9 | ) | (4.9 | ) | (12.7 | ) | (14.8 | ) | |||||||||||
Investment income | 5.5 | 2.9 | 13.5 | 7.2 | |||||||||||||||
Other non-operating items | (2.2 | ) | (2.2 | ) | (4.3 | ) | (7.2 | ) | |||||||||||
Total non-operating income (expense) | (0.6 | ) | (4.2 | ) | (3.5 | ) | (14.8 | ) | |||||||||||
Income from continuing operations before taxes and equity in loss of unconsolidated affiliate | 167.0 | 157.3 | 506.3 | 358.2 | |||||||||||||||
Provision for income taxes | 41.8 | 46.4 | 122.7 | 97.9 | |||||||||||||||
Equity in loss of unconsolidated affiliate | 1.1 | — | 1.7 | — | |||||||||||||||
Income from continuing operations | 124.1 | 110.9 | 381.9 | 260.3 | |||||||||||||||
Loss from discontinued operations before taxes | (0.1 | ) | (1.7 | ) | (5.7 | ) | (1.7 | ) | |||||||||||
Benefit for income taxes | — | (0.6 | ) | (1.4 | ) | (0.6 | ) | ||||||||||||
Loss from discontinued operations | (0.1 | ) | (1.1 | ) | (4.3 | ) | (1.1 | ) | |||||||||||
Net income | $ | 124.0 | $ | 109.8 | $ | 377.6 | $ | 259.2 | |||||||||||
Net income per share of common stock: | |||||||||||||||||||
Income from continuing operations | $ | 0.87 | $ | 0.77 | $ | 2.65 | $ | 1.80 | |||||||||||
Loss from discontinued operations | — | (0.01 | ) | (0.03 | ) | (0.01 | ) | ||||||||||||
Net income per share - basic | $ | 0.87 | $ | 0.76 | $ | 2.62 | $ | 1.79 | |||||||||||
Diluted net income per share of common stock: | |||||||||||||||||||
Income from continuing operations | $ | 0.86 | $ | 0.76 | $ | 2.62 | $ | 1.78 | |||||||||||
Loss from discontinued operations | — | (0.01 | ) | (0.03 | ) | (0.01 | ) | ||||||||||||
Net income per share - diluted | $ | 0.86 | $ | 0.75 | $ | 2.59 | $ | 1.77 | |||||||||||
Weighted average shares of stock outstanding - basic | 142.5 | 144.5 | 143.9 | 144.4 | |||||||||||||||
Weighted average shares of stock outstanding - diluted | 143.9 | 146.5 | 145.6 | 146.3 |
CONSOLIDATED BALANCE SHEETS
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September 30, 2018 |
December 31, 2017 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 986.7 | $ | 928.0 | ||||
Receivables, net of allowance for doubtful accounts of $0.8 million and $0.9 million at September 30, 2018 and December 31, 2017 | 143.5 | 142.5 | ||||||
Inventories | 284.4 | 259.1 | ||||||
Prepaid expenses and other current assets | 11.9 | 7.8 | ||||||
Current portion of notes receivable from asset sales | — | 22.2 | ||||||
Total current assets | 1,426.5 | 1,359.6 | ||||||
Timber and timberlands | 56.8 | 55.7 | ||||||
Property, plant and equipment, net | 976.2 | 926.1 | ||||||
Goodwill and other intangible assets | 26.3 | 26.7 | ||||||
Investments in and advances to affiliates | 52.6 | 7.8 | ||||||
Restricted cash | 13.3 | 13.3 | ||||||
Other assets | 59.8 | 56.8 | ||||||
Deferred tax asset | 2.9 | 2.5 | ||||||
Total assets | $ | 2,614.4 | $ | 2,448.5 | ||||
LIABILITIES AND EQUITY | ||||||||
Current portion of long-term debt | $ | 5.2 | $ | 25.1 | ||||
Accounts payable and accrued liabilities | 213.7 | 237.1 | ||||||
Income taxes payable | 11.6 | 4.5 | ||||||
Current portion of contingency reserves | 2.3 | 3.4 | ||||||
Total current liabilities | 232.8 | 270.1 | ||||||
Long-term debt, excluding current portion | 348.6 | 350.8 | ||||||
Deferred income taxes | 73.5 | 33.4 | ||||||
Contingency reserves, excluding current portion | 9.4 | 11.7 | ||||||
Other long-term liabilities | 138.7 | 178.0 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 153.4 | 153.4 | ||||||
Additional paid-in capital | 456.5 | 470.6 | ||||||
Retained earnings | 1,613.9 | 1,280.1 | ||||||
Treasury stock | (264.4 | ) | (177.5 | ) | ||||
Accumulated comprehensive loss | (148.0 | ) | (122.1 | ) | ||||
Total stockholders’ equity | 1,811.4 | 1,604.5 | ||||||
Total liabilities and stockholders’ equity | $ | 2,614.4 | $ | 2,448.5 |
CONSOLIDATED CASH FLOW STATEMENT
|
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Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income | $ | 124.0 | $ | 109.8 | $ | 377.6 | $ | 259.2 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 30.7 | 31.1 | 91.8 | 91.3 | ||||||||||||
Equity in (income) loss of unconsolidated affiliates, including dividends | 1.3 | (0.2 | ) | 0.2 | (1.2 | ) | ||||||||||
(Gain) loss on sale or impairment of long-lived assets, net | 0.3 | 0.7 | (0.3 | ) | (1.8 | ) | ||||||||||
Other operating credits and charges, net | (6.2 | ) | (0.9 | ) | (6.9 | ) | 4.5 | |||||||||
Stock-based compensation related to stock plans | 2.1 | 2.0 | 6.9 | 8.0 | ||||||||||||
Exchange (gain) loss on remeasurement | 0.5 | (0.1 | ) | 0.5 | 1.6 | |||||||||||
Cash settlements of warranties, net of accruals | (0.7 | ) | 0.1 | (2.2 | ) | (5.5 | ) | |||||||||
Cash settlements of contingencies, net of accruals | (0.6 | ) | (0.3 | ) | (2.1 | ) | (0.5 | ) | ||||||||
Pension contributions | (35.8 | ) | (6.1 | ) | (40.9 | ) | (12.7 | ) | ||||||||
Pension expense | 2.3 | 2.9 | 6.9 | 8.8 | ||||||||||||
Other adjustments, net | (0.1 | ) | 0.2 | 0.6 | 0.4 | |||||||||||
Changes in assets and liabilities: | ||||||||||||||||
(Increase) decrease in receivables | 19.2 | (17.1 | ) | (26.2 | ) | (61.9 | ) | |||||||||
(Increase) decrease in inventories | 1.7 | (8.5 | ) | (11.7 | ) | 4.5 | ||||||||||
(Increase) decrease in prepaid expenses | 1.1 | 0.6 | (4.1 | ) | (2.7 | ) | ||||||||||
Increase (decrease) in accounts payable and accrued liabilities | 1.9 | 18.1 | (17.6 | ) | 12.8 | |||||||||||
Increase in income taxes | 9.5 | 11.1 | 46.7 | 0.2 | ||||||||||||
Net cash provided by operating activities | 151.2 | 143.4 | 419.2 | 305.0 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Property, plant and equipment additions | (62.8 | ) | (35.0 | ) | (150.4 | ) | (80.7 | ) | ||||||||
Proceeds from sales of assets | — | 0.1 | 0.9 | 3.3 | ||||||||||||
Investments in unconsolidated affiliate | — | — | (45.0 | ) | — | |||||||||||
Payment of long-term deposit | — | — | — | (32.0 | ) | |||||||||||
Receipt of proceeds from notes receivable from asset sales | — | — | 22.2 | — | ||||||||||||
Other investing activities | (0.1 | ) | 0.1 | (0.4 | ) | 0.3 | ||||||||||
Net cash used in investing activities | (62.9 | ) | (34.8 | ) | (172.7 | ) | (109.1 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Repayment of long-term debt | (22.1 | ) | (1.2 | ) | (22.4 | ) | (2.5 | ) | ||||||||
Payment of cash dividends | (18.5 | ) | — | (56.1 | ) | — | ||||||||||
Purchase of treasury stock | (59.8 | ) | — | (98.7 | ) | — | ||||||||||
Sale of common stock, net of cash payments under equity plans | — | — | 0.1 | (0.4 | ) | |||||||||||
Taxes paid related to net share settlement of equity awards | (1.5 | ) | (0.5 | ) | (9.3 | ) | (5.3 | ) | ||||||||
Other financing activities | — | — | 3.1 | — | ||||||||||||
Net cash used in financing activities | (101.9 | ) | (1.7 | ) | (183.3 | ) | (8.2 | ) | ||||||||
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (0.6 | ) | 1.8 | (4.5 | ) | 1.7 | ||||||||||
Net increase in cash, cash equivalents and restricted cash | (14.2 | ) | 108.7 | 58.7 | 189.4 | |||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 1,014.2 | 753.2 | 941.3 | 672.5 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,000.0 | $ | 861.9 | $ | 1,000.0 | $ | 861.9 |
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
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Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Net sales: | |||||||||||||||||
Siding | $ | 240.8 | $ | 226.2 | $ | 729.4 | $ | 671.2 | |||||||||
OSB | 349.1 | 350.9 | 1,049.8 | 944.3 | |||||||||||||
EWP | 104.8 | 98.1 | 314.6 | 274.4 | |||||||||||||
South America | 34.5 | 38.3 | 122.2 | 114.8 | |||||||||||||
Other | 7.6 | 6.5 | 22.9 | 22.3 | |||||||||||||
Intersegment sales | — | (1.7 | ) | — | (3.7 | ) | |||||||||||
$ | 736.8 | $ | 718.3 | $ | 2,238.9 | $ | 2,023.3 | ||||||||||
Operating profit (loss): | |||||||||||||||||
Siding | $ | 59.8 | $ | 53.3 | $ | 167.8 | $ | 142.9 | |||||||||
OSB | 114.8 | 126.8 | 369.6 | 290.6 | |||||||||||||
EWP | 8.5 | 6.5 | 19.9 | 12.6 | |||||||||||||
South America | 6.5 | 5.8 | 25.0 | 16.4 | |||||||||||||
Other | (1.2 | ) | (1.6 | ) | (2.9 | ) | (2.7 | ) | |||||||||
Other operating credits and charges, net | 6.3 | 0.9 | 11.2 | (4.5 | ) | ||||||||||||
Gain (loss) on sale or impairment of long-lived assets, net | (0.3 | ) | (0.7 | ) | 0.3 | 1.8 | |||||||||||
General corporate and other expenses, net | (27.9 | ) | (29.5 | ) | (82.8 | ) | (84.1 | ) | |||||||||
Interest expense, net of capitalized interest | (3.9 | ) | (4.9 | ) | (12.7 | ) | (14.8 | ) | |||||||||
Investment income | 5.5 | 2.9 | 13.5 | 7.2 | |||||||||||||
Other non-operating items | (2.2 | ) | (2.2 | ) | (4.3 | ) | (7.2 | ) | |||||||||
Income from continuing operations before taxes | 165.9 | 157.3 | 504.6 | 358.2 | |||||||||||||
Provision for income taxes | 41.8 | 46.4 | 122.7 | 97.9 | |||||||||||||
Income from continuing operations | $ | 124.1 | $ | 110.9 | $ | 381.9 | $ | 260.3 |
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
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Quarter Ended |
Nine Months Ended |
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Housing starts1: | 2018 | 2017 | 2018 | 2017 | |||||||
Single Family | 235.6 | 229.6 | 687.7 | 648.6 | |||||||
Multi-Family | 95.0 | 87.8 | 284.5 | 263.6 | |||||||
330.6 | 317.4 | 972.2 | 912.2 |
1 Actual U.S. Housing starts data reported by U.S. Census Bureau |
The following table sets forth sales volumes for the quarter and nine
months ended
Quarter Ended September 30, 2018 | Quarter Ended September 30, 2017 | ||||||||||||||||
Sales Volume | Siding | OSB | EWP | Total | Siding | OSB | EWP | Total | |||||||||
SmartSide® Strand siding (MMSF) | 290.6 | — | — | 290.6 | 263.2 | — | — | 263.2 | |||||||||
SmartSide® fiber siding (MMSF) | 62.1 | — | — | 62.1 | 65.3 | — | — | 65.3 | |||||||||
CanExel® siding (MMSF) | 6.8 | — | — | 6.8 | 11.8 | — | — | 11.8 | |||||||||
OSB - commodity (MMSF) | 46.6 | 660.1 | 3.5 | 710.2 | 62.8 | 686.6 | 6.3 | 755.7 | |||||||||
OSB - value added (MMSF) | 1.2 | 435.0 | 9.1 | 445.3 | — | 402.3 | 10.2 | 412.5 | |||||||||
LVL (MMCF) | — | — | 1.7 | 1.7 | — | — | 1.9 | 1.9 | |||||||||
LSL (MMCF) | — | — | 1.1 | 1.1 | — | — | 0.8 | 0.8 | |||||||||
I-joist (MMLF) | — | — | 23.6 | 23.6 | — | — | 22.8 | 22.8 | |||||||||
Nine Months Ended September 30, 2018 | Nine Months Ended September 30, 2017 | ||||||||||||||||
Sales Volume | Siding | OSB | EWP | Total | Siding | OSB | EWP | Total | |||||||||
SmartSide® Strand siding (MMSF) | 862.0 | — | — | 862.0 | 797.2 | — | — | 797.2 | |||||||||
SmartSide® fiber siding (MMSF) | 175.4 | — | — | 175.4 | 197.5 | — | — | 197.5 | |||||||||
CanExel® siding (MMSF) | 31.7 | — | — | 31.7 | 40.6 | — | — | 40.6 | |||||||||
OSB - commodity (MMSF) | 111.6 | 1,938.6 | 28.9 | 2,079.1 | 189.0 | 1,973.8 | 25.9 | 2,188.7 | |||||||||
OSB - value added (MMSF) | 58.8 | 1,218.3 | 29.8 | 1,306.9 | — | 1,207.5 | 30.2 | 1,237.7 | |||||||||
LVL (MMCF) | — | — | 5.6 | 5.6 | — | — | 5.7 | 5.7 | |||||||||
LSL (MMCF) | — | — | 3.1 | 3.1 | — | — | 2.4 | 2.4 | |||||||||
I-joist (MMLF) | — | — | 69.1 | 69.1 | — | — | 66.0 | 66.0 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20181106005171/en/
Source:
Louisiana-Pacific Corporation
Media Relations:
Mark Morrison,
615-986-5886
or
Investor Relations:
Becky Barckley,
615-986-5600
or
Mike Kinney, 615-986-5600