Louisiana-Pacific Corporation Reports Strong Fourth Quarter Earnings, Year End Results
Portland, Ore-- Louisiana-Pacific Corp. (NYSE: LPX), a leading building products company, today announced fourth quarter 1999 earnings of $35 million (including a net after tax unusual gain of $3 million), or $0.34 per diluted share, on sales of $713 million. This compares to same quarter 1998 earnings of $16 million (including a $10 million after tax gain from an insurance settlement related to siding matters), or $0.15 per share, on sales of $519 million.
For 1999, Louisiana-Pacific reported annual earnings of $217 million, or $2.04 per diluted share. Excluding unusual items, annual earnings were $222 million, or $2.09 per diluted share. This represents nearly a six-times increase compared to annual earnings in 1998 of $38 million (excluding unusual items), or $0.35 per diluted share. Including unusual items, annual earnings in 1998 were $2 million, or $0.02 per diluted share. Net sales in 1999 were also higher, up 25 percent from $2.3 billion to $2.9 billion, with each quarter higher than the comparable quarter in 1998.
"While housing starts in 1999 were only slightly higher than the previous year, we significantly improved earnings due to increased demand and higher prices for structural products, lower oriented strand board conversion costs, and the rapid integration of three acquisitions made during the year," said Mark A. Suwyn, chairman and CEO of Louisiana Pacific Corporation. "These initiatives move us closer to our goal of being the premier producer of building products in North America."
Suwyn stated that the acquisitions of both specialty building products company ABTco and Le Groupe Forex, a leading Canadian producer of OSB, were accretive to fourth quarter earnings.
"We have seen the growth in our exterior products segment since the addition of ABTco last February, both in terms of sales and product offering. We are currently in the process of commercializing several specialty products, including a line of premium vinyl siding, composite decking and an array of treated engineered wood products that resist the Formosan termite, an evasive pest that inflicts significant damage to buildings in the Southern U.S.," said Suwyn. "The integration of Forex has also generated great value for the company in positioning us to capitalize on growing markets in the Eastern U.S. and Canada."
Suwyn said that the company closed its OSB operations for two weeks in December to keep inventories under control and complete major maintenance programs for the upcoming year. He noted that, "The shut down added cost during the fourth quarter, but puts the company in a good position for the first quarter of 2000."
"We expect 2000 to be a solid year. Housing starts are projected to remain strong despite predictions of a rise in short-term interest rates. Home builders continue to report backlogs, and sales in the repair and remodeling market are growing," said Suwyn.
Louisiana-Pacific also advanced its share repurchase program in 1999. Throughout the year, over 3.5 million shares were purchased, with more than 2.9 million shares acquired in the fourth quarter. Louisiana-Pacific expects to continue its share repurchase program into 2000.
Louisiana-Pacific, now in its 27th year, is a major building products company
headquartered in Portland, Oregon, with manufacturing facilities throughout the U.S. and
in Canada and Ireland. Visit
FORWARD LOOKING STATEMENTS
This news release contains statements concerning Louisiana-Pacific Corp.'s future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The accuracy of such statements is 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 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 such forward-looking statements are discussed in greater detail in the company's Securities and Exchange Commission filings.
Unusual Credits and Charges
Dollar amounts in millions except per share
Fourth Quarter
--------------
1999 1998
Pre-Tax After-Tax Pre-Tax After-Tax
Unusual credits
and charges $5.3 $3.2 $15.9 $9.7
==== =====
Income
excluding
unusual credits
and charges 32.2 6.2
---- ----
Net income $35.4 $15.9
===== =====
Earnings (loss) per share - diluted:
Unusual credits
and charges $0.03 $0.09
Income
excluding
unusual credits
and charges 0.31 0.06
---- -----
Net income $0.34 $0.15
===== =====
Twelve Months
-------------
1999 1998
Pre-Tax After-Tax Pre-Tax After-Tax
Unusual credits
and charges $(8.2) $(5.1) $(47.8) $(36.1)
===== ======
Income
excluding
unusual credits
and charges 221.9 38.1
----- ----
Net income $216.8 $2.0
====== ====
Earnings (loss) per share - diluted
Unusual credits
and charges $(0.05) $(0.33)
Income
excluding
unusual credits
and charges 2.09 0.35
---- ----
Net income $2.04 $0.02
===== =====
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions except per share)
(Unaudited)
Quarter Ended Dec. 31
1999 1998
Net sales $712.6 $519.3
Income before taxes
and minority interest 57.6(1) 21.3(1)
Net income 35.4(1) 15.9(1)
Net income excluding unusual items 32.2(1) 6.2(1)
Net income per share-
basic and diluted .34(1) .15(1)
Net income per share
excluding unusual items .31(1) .06(1)
Average shares
outstanding (millions)-
Basic 105.4 108.4
Diluted 105.4 108.6
Year Ended Dec. 31
1999 1998
Net sales $2,878.6 $2,297.1
Income before taxes
and minority interest 357.0(1) 12.6(1)
Net income 216.8(1) 2.0(1)
Net income excluding unusual items 221.9(1) 38.1(1)
Net income per share-
basic and diluted 2.04(1) 0.02(1)
Net income per share
excluding unusual items 2.09(1) .35(1)
Average shares
outstanding (millions)-
Basic 106.2 108.4
Diluted 106.2 108.6
SALES BY QUARTER (In millions)
1st 2nd 3rd 4th Year
------ ------ ------ ------ --------
1998 $548.3 $623.2 $606.3 $519.3 $2,297.1
1999 $600.1 $768.5 $797.4 $712.6 $2,878.6
NET INCOME (LOSS) BY QUARTER (In millions)
1st 2nd 3rd 4th Year
------ ------ ------- ------ -------
1998 $(25.1) $203.9(1) $(192.7)(1) $15.9(1) $2.0(1)
1999 $27.2 $84.9(1) $69.3(1) $35.4(1) $216.8(1)
NET INCOME (LOSS) PER SHARE BY QUARTER-
BASIC AND DILUTED
1st 2nd 3rd 4th Year
------ ------ ------- ------ -------
1998 $(.23) $1.87(1) $(1.77)(1) $.15(1) $.02(1)
1999 $.26 $.79(1) $.65(1) $.34(1) $2.04(1)
- (1) In the second quarter of 1998,
L-P recorded a net gain of $328 million ($195 million after taxes, or $1.79 per share) primarily resulting from gains on the sales of timberland, sawmill and distribution assets in California and the Weather-Seal window and door business. Charges relating to the settlement of legal issues in Montrose, Colorado of $14 million after taxes (or $.13 per share) and other charges were netted against the asset sale gains.In the third quarter of 1998,
L-P recorded a net loss of $392 million ($241 million after taxes, or $2.21 per share) resulting from a charge to adjust siding-relating reserves to reflect revisions to the national class-action settlement, the write-down of an operating facility, and other items. Gains on insurance recoveries and the sale of surplus properties were netted against this charge.In the fourth quarter of 1998,
L-P recorded a $16 million gain ($10 million after taxes, or $ .09 per share) on a recovery from an insurance company for siding-related matters.In the second quarter of 1999,
L-P recorded a $5 million gain (3 million after taxes, or $.03 per diluted share) on the sale of timberland.In the third quarter of 1999,
L-P 's Ketchikan Pulp Company subsidiary recorded a net charge of $18.7 million ($11.5 million after taxes, or $.11 per diluted share) primarily related to reducing the carrying value of the assets to be sold to the expected sales value and to record an increase in estimated environmental remediation liabilities.In the fourth quarter of 1999,
L-P recorded a gain on the sale of its Associated Chemists, Inc. subsidiary of $14.5 million ( $8.9 million after taxes, or $.08 per diluted share ) and a write-off of a note receivable of $9.2 million ($5.7 million after taxes, or $.05 pre diluted share) received in a sale of assets in a prior year. Both items were recorded in unusual credits and charges in the consolidated statement of income. - (2) Results of operations for interim periods are not necessarily indicative of results
to be expected for an entire year.
LOUISIANA-PACIFIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollar amounts in millions except per share) (Unaudited) Quarter Ended Year Ended Dec. 31 Dec. 31 1999 1998 1999 1998 Net sales $712.6 $519.3 $2,878.6 $2,297.1 -------- -------- -------- -------- Costs and expenses: Cost of sales 529.6 423.2 2,080.1 1,853.8 Depreciation, amortization and depletion 61.1 46.4 202.0 185.4 Selling and administrative 61.3 46.8 219.4 184.7 Unusual credits and charges, net (5.3) (15.9) 8.2 47.8 Interest expense 18.2 14.3 47.9 37.5 Interest income (9.9) (16.8) (36.0) (24.7) -------- -------- -------- -------- Total costs and expenses 655.0 498.0 2,521.6 2,284.5 -------- -------- -------- -------- Income before taxes and minority interest 57.6 21.3 357.0 12.6 Provision for income taxes 21.4 6.2 139.5 14.4 Minority interest in net income (loss) of consolidated subsidiaries .8 (.8) .7 (3.8) -------- -------- -------- -------- Net income $35.4 $15.9 $216.8 $2.0 ======== ======== ======== ======== Net income per share- basic and diluted $.34 $.15 $2.04 $.02 ======== ======== ======== ======== Cash dividends per share $.14 $.14 $.56 $.56 ======== ======== ======== ======== Average shares outstanding (millions)- Basic 105.4 106.8 106.2 108.4 ======== ======== ======== ======== Diluted 105.4 106.8 106.2 108.6 ======== ======== ======== ======== LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollar amounts in millions) (Unaudited) Dec. 31, 1999 Dec. 31, 1998 ASSETS Cash and cash equivalents $116.0 $126.5 Accounts receivable, net 200.7 134.7 Inventories 293.4 205.7 Prepaid expenses 18.5 8.1 Income tax refunds receivable -- 43.9 Deferred income taxes 110.8 93.2 -------- -------- Total current assets 739.4 612.1 -------- -------- Timber and timberlands 611.1 499.0 Net property, plant and equipment 1,334.0 913.3 Notes receivable from asset sales 403.8 403.8 Goodwill, net of amortization 347.7 60.0 Other assets 52.2 30.9 -------- -------- Total assets $3,488.2 $2,519.1 ======== ======== LIABILITIES AND EQUITY Current portion of long-term debt $44.9 $34.1 Accounts payable and accrued liabilities 306.5 192.5 Current portion of contingency reserves 180.0 140.0 Income tax payable 9.3 -- -------- -------- Total current liabilities 540.7 366.6 -------- -------- Long-term debt, excluding current portion: Limited recourse notes payable 396.5 396.5 Other long-term debt 618.3 63.3 -------- -------- Total long-term debt, excluding current portion 1,014.8 459.8 -------- -------- Contingency reserves, excluding current portion 128.8 228.0 Deferred income taxes and other 443.9 241.9 Commitments and contingencies Total stockholders' equity 1,360.0 1,222.8 -------- -------- Total liabilities and equity $3,488.2 $2,519.1 ======== ======== LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES SELECTED SEGMENT INFORMATION (Dollar amounts in millions) (Unaudited) Quarter Ended Year Ended Dec. 31 Dec. 31 1999 1998 1999 1998 Sales: Structural products $397.0 $302.8 $1,621.2 $1,227.7 Exterior products 58.6 23.8 254.1 106.6 Industrial panel products 70.8 41.4 267.9 170.8 Other products 149.8 135.2 618.5 717.1 Pulp 36.4 16.1 116.9 74.9 ------- ------- --------- --------- Total sales $712.6 $519.3 $2,878.6 $2,297.1 ======= ======= ========= ========= Profit (loss): Structural products $66.4 $42.4 $440.0 $197.2 Exterior products 11.6 4.3 53.0 21.8 Industrial panel products 4.4 2.1 12.8 6.0 Other products 3.3 (10.1) (10.7) (19.9) Pulp -- (11.3) (14.7) (37.6) Unusual credits and charges, net 5.3 15.9 (8.2) (47.8) General corporate and other expense, net (25.1) (24.5) (103.3) (94.3) Interest income (expense), net (8.3) 2.5 (11.9) (12.8) ------- ------- --------- --------- Total profit $57.6 $21.3 $357.0 $12.6 ======= ======= ========= ========= LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES SUMMARY OF PRODUCTION VOLUMES Quarter Ended Year Ended Dec. 31 Dec. 31 1999 1998 1999 1998 North American oriented strand board panels, million square ft 3/8" basis 1,242 1,022 4,406 3,934 Softwood plywood million square ft 3/8" basis 241 227 943 983 Lumber, million board feet 237 258 1,029 1,110 Oriented strand board siding and specialty products million square ft 3/8" basis 96 82 386 383 Hardboard siding surface measure million square ft basis 70 -- 236 -- Engineered I-Joists, million lineal feet 23 17 87 86 Laminated Veneer Lumber, thousand cubic ft 1,300 1,500 6,300 7,100 Industrial panel products (particleboard, medium density fiberboard and hardboard), million square ft 3/4" basis 139 140 621 575 Pulp, thousand short tons 95 76 374 286