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Press release from Business Wire

LP Reports First Quarter 2012 Results

Monday, May 07, 2012

LP Reports First Quarter 2012 Results08:00 EDT Monday, May 07, 2012 NASHVILLE, Tenn. (Business Wire) -- Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported today results for the first quarter of 2012, which included the following: Total sales for the first quarter of $362 million were higher by 9 percent versus a year ago. Loss from continuing operations was $11 million ($0.08 per diluted share). Non-GAAP adjusted loss from continuing operations was $9 million ($0.06 per diluted share). Adjusted EBITDA from continuing operations for the first quarter was income of $21 million compared to income of $13 million in the first quarter of 2011. Cash and cash equivalents were $281 million as of March 31, 2012. "All of our North American segments outperformed the same quarter last year,” said Curt Stevens, chief executive officer. “For the first time in many years, the housing news has been positive and this was reflected in our results. Of particular note was the performance of our Siding segment where operating profit improved by more than 30 percent compared to the same quarter last year and more than doubled compared to last quarter.” For the quarter ended March 31, 2012, LP reported net sales of $362 million, an increase from $332 million in the first quarter of 2011. For the first quarter, the company reported an operating loss of $2 million as compared to a loss of $18 million in the first quarter of 2011. For the first quarter of 2012, LP reported a loss from continuing operations of $11 million, or $0.08 per diluted share, as compared to a loss from continuing operations of $23 million, or $0.18 per diluted share for the first quarter of 2011. ORIENTED STRAND BOARD (OSB) SEGMENT LP's OSB segment manufactures and distributes OSB structural panel products. LP is currently operating seven facilities and has indefinitely curtailed three other facilities due to market conditions. The OSB segment reported net sales for the first quarter of 2012 of $149 million, an increase from $132 million of net sales in the first quarter of 2011. For the first quarter of 2012, the OSB segment reported an operating loss of $0.3 million compared with a loss of $9 million in the first quarter of 2011. For the first quarter, LP realized an increase of $8 million in adjusted EBITDA from continuing operations for this segment compared to the first quarter of 2011. For the first quarter of 2012 compared to the first quarter of 2011, sales volumes were up 4 percent with sales price increasing by 6 percent. The increase in sales price accounted for approximately an $8 million increase in both operating results and adjusted EBITDA from continuing operations. SIDING SEGMENT LP's Siding segment consists of LP SmartSide® siding as well as LP's prefinished CanExel® siding line. These products are used in new construction as well as in the repair and remodeling markets. The Siding segment reported net sales of $113 million in the first quarter of 2012, an increase of 6 percent from $106 million in the year-ago first quarter. For the first quarter of 2012, the Siding segment reported operating income of $17 million compared to $13 million in the year-ago quarter. For the first quarter, LP reported $21 million in adjusted EBITDA from continuing operations, an increase of $4 million compared to the first quarter of 2011. ENGINEERED WOOD PRODUCTS SEGMENT (EWP) The EWP segment is comprised of I-Joist (IJ), Laminated Veneer Lumber and Laminated Strand Lumber (LVL and LSL). These products are principally used in new construction. EWP sales in the first quarter of 2012 totaled $49 million, a slight increase from a year ago. Operating losses decreased to $3 million for the first quarter of 2012 from $6 million for the first quarter of 2011. For the first quarter, LP realized an increase in adjusted EBITDA from continuing operations of $1 million for this segment as compared to the first quarter of 2011. SOUTH AMERICA SEGMENT The South American segment consists of OSB mills located in Chile and Brazil. South America sales in the first quarter of 2012 totaled $42 million, an increase of 20 percent from $35 million in the year-ago first quarter. For the first quarter of 2012, the South America segment reported an operating income of $3 million compared to $4 million in the year-ago quarter. For the first quarter, LP reported $6 million in adjusted EBITDA from continuing operations, a slight decrease compared to the first quarter of 2011. COMPANY OUTLOOK “We are cautiously optimistic that housing activity is on the road to recovery,” Stevens said. “We are in an excellent position to capitalize on incremental demand with the resources in place to manufacture and deliver quality products to our customers.” LP is a premier supplier of building materials, delivering innovative, high-quality commodity and specialty products to its retail, wholesale, homebuilding and industrial customers. Visit LP's web site at www.lpcorp.com for additional information on the company as well as reconciliation of non-GAAP results. 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. The matters addressed in these statements are subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, including the level of interest rates and housing starts, market demand for the company's products, and prices for structural products; the availability, cost and other terms of capital; the efficiency and consequences of operations improvement initiatives and cash conservation measures; the effect of forestry, land use, environmental and other governmental regulations; the ability to obtain regulatory approvals; and the risk of losses from fires, floods and other natural disasters. These and other factors that could cause or contribute to actual results differing materially from those contemplated by such forward-looking statements are discussed in greater detail in the company's Securities and Exchange Commission filings.   LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES FINANCIAL AND QUARTERLY DATA (Dollar amounts in millions, except per share amounts) (Unaudited)     Quarter Ended March 31, 2012   2011 Net sales $ 361.5 $ 331.7   Loss from operations $ (2.1 ) $ (18.2 )   Loss from continuing operations before taxes and equity in losses of unconsolidated affiliates $ (10.6 ) $ (26.4 )   Non-GAAP Adjusted loss from continuing operations $ (8.8 ) $ (16.2 )   Loss from continuing operations $ (11.2 ) $ (22.9 )   Net loss attributed to LP $ (11.3 ) $ (23.0 )   Net loss per share - basic and fully diluted $ (0.08 ) $ (0.18 )   Average shares of stock outstanding - basic and fully diluted 136.6 131.3     CONSOLIDATED STATEMENTS OF INCOME LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (Dollar amounts in millions, except per share amounts) (Unaudited)     Quarter Ended March 31, 2012   2011 Net sales $ 361.5 $ 331.7 Operating costs and expenses: Cost of sales 313.3 295.0 Depreciation and amortization 19.1 21.4 Selling and administrative 31.3 28.8 Loss on sale or impairment of long-lived assets, net 0.1 5.5 Other operating credits and charges, net   (0.2 )   (0.8 ) Total operating costs and expenses   363.6     349.9   Loss from operations   (2.1 )   (18.2 )   Non-operating income (expense): Interest expense, net of capitalized interest (12.6 ) (14.0 ) Investment income 4.2 4.0 Other non-operating items   (0.1 )   1.8   Total non-operating expense   (8.5 )   (8.2 )   Loss from continuing operations before taxes and equity in losses of unconsolidated affiliates (10.6 ) (26.4 ) Benefit for income taxes (1.2 ) (6.8 ) Equity in loss of unconsolidated affiliates   1.8     3.3   Loss from continuing operations   (11.2 )   (22.9 )   Loss from discontinued operations before taxes (0.2 ) — Benefit for income taxes   (0.1 )   —   Loss from discontinued operations   (0.1 )   —     Net loss (11.3 ) (22.9 ) Less: Net income attributed to non-controlling interest   —     0.1   Loss attributed to Louisiana-Pacific Corporation $ (11.3 ) $ (23.0 )   Loss per share of common stock (basic): Loss from continuing operations $ (0.08 ) $ (0.18 ) Loss from discontinued operations   —     —   Net loss per share $ (0.08 ) $ (0.18 )   Net loss per share of common stock (diluted): Loss from continuing operations $ (0.08 ) $ (0.18 ) Loss from discontinued operations   —     —   Net loss per share $ (0.08 ) $ (0.18 )   Average shares of stock outstanding - basic 136.6 131.3 Average shares of stock outstanding - diluted 136.6 131.3   Amounts attributed to LP Corporation common shareholders Loss from continuing operations, net of tax $ (11.2 ) $ (23.0 ) Loss from discontinued operations, net of tax   (0.1 )   —   $ (11.3 ) $ (23.0 )     CONDENSED CONSOLIDATED BALANCE SHEETS LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (Dollar amounts in millions) (Unaudited)     March 31, 2012   December 31, 2011 ASSETS Cash and cash equivalents $ 280.5 $ 340.0 Receivables 107.4 65.1 Income tax receivable 3.5 3.5 Inventories 212.3 163.6 Prepaid expenses and other current assets 3.9 5.7 Deferred income taxes 17.0 17.0 Current portion of notes receivable from asset sales 10.0 10.0 Assets held for sale   43.6     51.9   Total current assets   678.2     656.8     Timber and timberlands 43.6 45.5   Property, plant and equipment, at cost 2,033.4 2,028.1 Accumulated depreciation   (1,264.3 )   (1,245.9 ) Net property, plant and equipment   769.1     782.2     Notes receivable from asset sales 523.5 523.5 Long-term investments 1.0 0.7 Restricted cash 12.0 12.9 Investments in and advances to affiliates 79.9 79.1 Deferred debt costs 8.5 8.9 Other assets 27.4 26.3 Long-term deferred tax asset   4.0     4.0   Total assets $ 2,147.2   $ 2,139.9     LIABILITIES AND EQUITY Current portion of long-term debt $ 6.6 $ 5.3 Current portion of limited recourse notes payable 7.9 7.9 Accounts payable and accrued liabilities 142.9 122.3 Current portion of contingency reserves   4.0     4.0   Total current liabilities   161.4     139.5     Long-term debt, excluding current portion 719.3 715.9 Contingency reserves, excluding current portion 16.7 17.2 Other long-term liabilities 145.5 160.4 Deferred income taxes 108.4 106.0   Stockholders' equity: Common stock 149.8 149.8 Additional paid-in capital 538.7 549.9 Retained earnings 670.5 681.8 Treasury stock (262.3 ) (274.4 ) Accumulated comprehensive loss   (100.8 )   (106.2 ) Total stockholders' equity   995.9     1,000.9   Total liabilities and stockholders' equity $ 2,147.2   $ 2,139.9       CONDENSED CONSOLIDATED CASH FLOW STATEMENT LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (Dollar amounts in millions) (Unaudited)     Quarter Ended March 31, 2012   2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (11.3 ) $ (22.9 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 19.1 21.4 Loss from unconsolidated affiliates 1.8 3.3 Loss on sale or impairment of long-lived assets 0.1 5.5 Other operating credits and charges, net (0.2 ) — Stock-based compensation related to stock plans 2.7 3.5 Exchange loss on remeasurement 0.3 2.5 Cash settlement of contingencies (0.6 ) (0.5 ) Cash settlements of warranties, net of accruals (2.4 ) (1.2 ) Pension (payments) expense, net 1.6 — Non-cash interest expense, net 0.6 1.4 Other adjustments, net (0.1 ) 0.2 Increase in receivables (40.6 ) (30.5 ) Decrease (increase) in income tax receivable 0.1 (8.7 ) Increase in inventories (45.8 ) (49.8 ) Decrease in prepaid expenses 1.9 2.4 Increase in accounts payable and accrued liabilities 9.7 1.7 Decrease (increase) in deferred income taxes   (1.3 )   3.3   Net cash used in operating activities   (64.4 )   (68.4 ) CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment additions (2.6 ) (2.4 ) Investments and advances to joint ventures (3.0 ) (2.0 ) Proceeds from sales of assets 8.9 — Decrease (increase) in restricted cash under letters of credit/credit facility   0.9     8.3   Net cash provided by investing activities   4.2     3.9   EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS $ 0.7 $ (3.6 ) Net decrease in cash and cash equivalents (59.5 ) (68.1 ) Cash and cash equivalents at beginning of period   340.0     389.3   Cash and cash equivalents at end of period $ 280.5   $ 321.2       LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES SELECTED SEGMENT INFORMATION (Dollar amounts in millions) (Unaudited)     Quarter Ended March 31, Dollar amounts in millions 2012   2011 Net sales: OSB $ 149.0 $ 132.1 Siding 113.1 106.2 Engineered Wood Products 48.6 48.3 South America 42.4 35.3 Other 10.0 10.5 Intersegment sales   (1.6 )   (0.7 ) $ 361.5   $ 331.7   Operating profit (loss): OSB $ (0.3 ) $ (9.1 ) Siding 16.8 12.7 Engineered Wood Products (2.8 ) (5.5 ) South America 3.1 3.6 Other (0.7 ) (0.7 ) Other operating credits and charges, net 0.2 0.8 Loss on sale or impairment of long-lived assets (0.1 ) (5.5 ) General corporate and other expenses, net (20.1 ) (17.8 ) Foreign currency gains (losses) (0.1 ) 1.8 Other-than-temporary investment impairment — — Investment income 4.2 4.0 Interest expense, net of capitalized interest   (12.6 )   (14.0 ) Loss from continuing operations before taxes (12.4 ) (29.7 ) Benefit for income taxes   (1.2 )   (6.8 ) Loss from continuing operations $ (11.2 ) $ (22.9 )     LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES SUMMARY OF PRODUCTION VOLUMES (1)   The following table sets forth production volumes for the quarter ended March 31, 2012 and 2011.     Quarter Ended March 31, 2012   2011 Oriented strand board, million square feet 3/8" basis(1) 799 760 Oriented strand board, million square feet 3/8" basis (produced by wood-based siding mills) 45 46 Wood-based siding, million square feet 3/8" basis 240 221 Engineered I-Joist, million lineal feet(1) 14 13 Laminated veneer lumber (LVL), thousand cubic feet(1) and laminated strand lumber (LSL), thousand cubic feet 1,689 1,629   (1) Includes volumes produced by joint venture operations or under sales arrangements and sold to LP.   Louisiana-Pacific CorporationMedia RelationsMary Cohn, 615-986-5886orInvestor RelationsBecky Barckley, 615-986-5600orMike Kinney, 615-986-5600