LP Reports First Quarter 2009 Results
-
Total sales for the first quarter of
$204.6 million were down 41 percent versus a year ago, primarily the result of dramatically reduced U.S. housing starts, which dropped 49 percent from first quarter 2008 levels, as weakness in home building continued. -
A loss from continuing operations of
$30.2 million , or$0.29 per diluted share, for the first quarter of 2009 which is an improvement of 34 percent over the first quarter of 2008. -
EBITDA from continuing operations for the first quarter was an
$18.5 million loss or a 58 percent improvement over the first quarter of 2008. -
In very tough credit market conditions, LP completed its refinancings
and realized
$140.2 million in net cash in addition to$70.7 million in net tax refunds.
“The decline in home building and related activity continued during the
first quarter of 2009, driven by the ongoing credit crisis and
deteriorated global economic conditions,” said LP’s Chief Executive
Officer
FIRST QUARTER RESULTS
For the quarter ended
For the first quarter of 2009, LP reported a loss from continuing
operations of
ORIENTED STRAND BOARD (OSB) SEGMENT
LP’s OSB segment manufactures and distributes OSB structural panel
products. LP is currently operating eight facilities and has
indefinitely curtailed four other facilities due to market conditions.
The OSB segment reported net sales for the first quarter of 2009 of
Operating results reflected the favorable effects of continued actions taken to reduce raw material costs. Also, in the first quarter of 2009, LP realized reductions in the cost of petroleum-based products used in production and benefited from the weakening of the Canadian dollar compared to the first quarter of 2008.
“In 2009, we continued to take a number of significant steps to reduce the losses in our OSB business through market curtailments and cost reductions,” Frost explained. “Throughout this process, we remain committed to our safety and quality programs.”
SIDING SEGMENT
LP’s Siding segment consists of LP SmartSide® siding as well as LP’s
prefinished LP 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
In the first quarter of 2009, sales were off across all regions due to significantly reduced housing starts partially offset by continued strength in the repair and remodel markets as well as increased market penetration. Consistent with actions taken in OSB, the Siding segment also cut production rates during the quarter to address inventory levels.
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. Given the significant decline in
housing starts, this segment saw similar reductions in sales. EWP
segment sales in the first quarter of 2009 totaled
The lower operating results in the first quarter were driven by lower volumes, softening prices and costs associated with the mill that produces LSL.
COMPANY OUTLOOK
“The start of 2009 has proven to be very challenging for our businesses and while the level of activity for the remainder of the year is expected to increase, the rate is unclear. Our goal this year is to conserve cash and improve liquidity so that when this economic downturn subsides, we will be well positioned to compete,” Frost concluded.
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
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LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
FINANCIAL AND QUARTERLY DATA (Dollar amounts in millions, except per share amounts) (Unaudited) |
||||||||||
| Quarter Ended | ||||||||||
| March 31, | ||||||||||
| 2009 | 2008 | |||||||||
| Net sales | $ | 204.6 | $ | 349.4 | ||||||
| Income (loss) from operations | $ | (42.5 | ) | $ | (85.7 | ) | ||||
|
Income (loss) before income taxes and equity in loss of unconsolidated affiliates |
$ | (46.8 | ) | $ | (75.5 | ) | ||||
|
Income (loss) from continuing operations excluding (gain) loss on sale or impairment of long-lived assets and other operating credits and charges, net |
$ | (32.3 | ) | $ | (48.1 | ) | ||||
| Income (loss) from continuing operations | $ | (30.2 | ) | $ | (45.9 | ) | ||||
| Net income (loss) attributable to LP | $ | (30.4 | ) | $ | (46.4 | ) | ||||
| Net income (loss) per share - basic and diluted | $ | (0.30 | ) | $ | (0.45 | ) | ||||
| Average shares outstanding (in millions) | ||||||||||
| Basic and diluted | 102.8 | 102.9 | ||||||||
Calculation of income (loss) from continuing operations excluding (gain) loss on sale or impairment of long-lived assets and other operating credits and charges, net, gain on early debt extinguishment and other than temporary investment impairment:
| Income (loss) from continuing operations | $ | (30.2 | ) | $ | (45.9 | ) | ||||
| Other than temporary investment impairment | 0.9 | 0.8 | ||||||||
| Gain on early extinguishment of debt | (0.6 | ) | - | |||||||
| (Gain) loss on sale or impairment of long-lived assets | 0.1 | (0.4 | ) | |||||||
| Other operating credits and charges, net | (3.8 | ) | (4.0 | ) | ||||||
| (3.4 | ) | (3.6 | ) | |||||||
| Provision (benefit) for income taxes on above items | 1.3 | 1.4 | ||||||||
| (2.1 | ) | (2.2 | ) | |||||||
| $ | (32.3 | ) | $ | (48.1 | ) | |||||
| Per share - basic and diluted | $ | (0.31 | ) | $ | (0.47 | ) | ||||
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (Dollar amounts in millions, except per share amounts) (Unaudited) |
||||||||||
| Quarter Ended March 31, | ||||||||||
| 2009 | 2008 | |||||||||
| Net sales | $ | 204.6 | $ | 349.4 | ||||||
| Operating costs and expenses: | ||||||||||
| Cost of sales | 204.4 | 372.8 | ||||||||
| Depreciation, amortization and cost of timber harvested | 19.1 | 26.6 | ||||||||
| Selling and administrative | 27.3 | 40.1 | ||||||||
| (Gain) loss on sale or impairment of long-lived assets | 0.1 | (0.4 | ) | |||||||
| Other operating credits and charges, net | (3.8 | ) | (4.0 | ) | ||||||
| Total operating costs and expenses | 247.1 | 435.1 | ||||||||
| Income (loss) from operations | (42.5 | ) | (85.7 | ) | ||||||
| Non-operating income (expense): | ||||||||||
| Foreign currency exchange gain (loss) | 2.6 | 9.4 | ||||||||
| Gain on early debt extinguishment | 0.6 | - | ||||||||
| Other than temporary investment impairment | (0.9 | ) | (0.8 | ) | ||||||
| Interest expense, net of capitalized interest | (11.8 | ) | (11.2 | ) | ||||||
| Investment income | 5.2 | 12.8 | ||||||||
| Total non-operating income (expense) | (4.3 | ) | 10.2 | |||||||
|
Income (loss) before taxes and equity in loss of unconsolidated affiliates |
(46.8 | ) | (75.5 | ) | ||||||
| Provision (benefit) for income taxes | (19.2 | ) | (35.9 | ) | ||||||
| Equity in loss of unconsolidated affiliates | 2.6 | 6.3 | ||||||||
| Income (loss) from continuing operations | (30.2 | ) | (45.9 | ) | ||||||
| Discontinued operations: | ||||||||||
| Loss from discontinued operations before income taxes | (0.7 | ) | (0.8 | ) | ||||||
| Income tax benefit | (0.3 | ) | (0.3 | ) | ||||||
| Loss from discontinued operations | (0.4 | ) | (0.5 | ) | ||||||
| Net income (loss) | (30.6 | ) | (46.4 | ) | ||||||
| Less: Net loss attributed to noncontrolling interest | (0.2 | ) | - | |||||||
| Net income (loss) attributed to Louisiana-Pacific Corporation | $ | (30.4 | ) | $ | (46.4 | ) | ||||
| Net income (loss) per share of common stock (basic and diluted): | ||||||||||
| Income (loss) from continuing operations | $ | (0.29 | ) | $ | (0.44 | ) | ||||
| Loss from discontinued operations | (0.01 | ) | (0.01 | ) | ||||||
| Net income (loss) per share | $ | (0.30 | ) | $ | (0.45 | ) | ||||
| Average shares of stock outstanding - basic and diluted | 102.8 | 102.9 | ||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (Dollar amounts in millions) (Unaudited) |
||||||||||
| March 31, 2009 | December 31, 2008 | |||||||||
| ASSETS | ||||||||||
| Cash and cash equivalents | $ | 279.9 | $ | 97.7 | ||||||
| Short-term investments | 7.8 | 21.4 | ||||||||
| Receivables, net | 77.7 | 43.8 | ||||||||
| Income tax receivable | 21.6 | 94.2 | ||||||||
| Inventories | 188.9 | 187.3 | ||||||||
| Prepaid expenses and other current assets | 3.9 | 9.9 | ||||||||
| Deferred income taxes | 25.3 | 25.3 | ||||||||
| Current portion of notes receivable from asset sales | 20.0 | 20.0 | ||||||||
| Current assets of discontinued operations | 3.1 | 3.1 | ||||||||
| Total current assets | 628.2 | 502.7 | ||||||||
| Timber and timberlands | 54.1 | 55.6 | ||||||||
| Property, plant and equipment | 2,331.5 | 2,324.6 | ||||||||
| Accumulated depreciation | (1,266.8 | ) | (1,250.3 | ) | ||||||
| Net property, plant and equipment | 1,064.7 | 1,074.3 | ||||||||
| Notes receivable from asset sales | 238.6 | 238.6 | ||||||||
| Long-term investments | 12.7 | 19.3 | ||||||||
| Restricted cash | 49.9 | 76.7 | ||||||||
| Investments in and advances to affiliates | 187.6 | 186.9 | ||||||||
| Deferred debt costs | 17.4 | 3.3 | ||||||||
| Other assets | 25.2 | 26.3 | ||||||||
| Long-term assets of discontinued operations | 5.0 | 5.0 | ||||||||
| Total assets | $ | 2,283.4 | $ | 2,188.7 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current portion of long-term debt | $ | 11.3 | $ | 7.7 | ||||||
| Current portion of limited recourse notes payable | 20.0 | 20.0 | ||||||||
| Short-term notes payable | 2.0 | 2.0 | ||||||||
| Accounts payable and accrued liabilities | 115.9 | 121.5 | ||||||||
| Current portion of deferred tax liabilities | 4.7 | 4.7 | ||||||||
| Current portion of contingency reserves | 10.0 | 10.0 | ||||||||
| Total current liabilities | 163.9 | 165.9 | ||||||||
| Long-term debt, excluding current portion: | ||||||||||
| Limited recourse notes payable | 233.3 | 233.3 | ||||||||
| Other long-term debt | 378.4 | 239.3 | ||||||||
| Total long-term debt, excluding current portion | 611.7 | 472.6 | ||||||||
| Contingency reserves, excluding current portion | 25.7 | 30.5 | ||||||||
| Other long-term liabilities | 127.0 | 130.8 | ||||||||
| Deferred income taxes | 166.4 | 187.9 | ||||||||
| Redeemable noncontrolling interest | 18.8 | 18.7 | ||||||||
| Stockholders' equity: | ||||||||||
| Common stock | 116.9 | 116.9 | ||||||||
| Additional paid-in capital | 445.8 | 441.3 | ||||||||
| Retained earnings | 988.9 | 1,019.5 | ||||||||
| Treasury stock | (287.1 | ) | (297.3 | ) | ||||||
| Accumulated comprehensive loss | (94.6 | ) | (98.1 | ) | ||||||
| Total stockholders' equity | 1,169.9 | 1,182.3 | ||||||||
| Total liabilities and equity | $ | 2,283.4 | $ | 2,188.7 | ||||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (Dollar amounts in millions) (Unaudited) |
||||||||||
| Quarter Ended March 31, | ||||||||||
| 2009 | 2008 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
| Net loss | $ | (30.6 | ) | $ | (46.4 | ) | ||||
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||
| Depreciation, amortization and cost of timber harvested | 19.1 | 26.6 | ||||||||
| Loss of unconsolidated affiliates | 2.6 | 6.3 | ||||||||
| Other operating charges and credits, net | 0.7 | 1.8 | ||||||||
| (Gain) loss on sale or impairment of long-lived assets | - | (0.4 | ) | |||||||
| Other than temporary investment impairment | 0.9 | 0.8 | ||||||||
| Stock based compensation expense related to stock plans | 1.8 | 2.2 | ||||||||
| Exchange (gain) loss on remeasurement | (5.4 | ) | (7.8 | ) | ||||||
| Net accretion on available for sale securities | - | (0.6 | ) | |||||||
| Cash settlement of contingencies | (5.0 | ) | (6.1 | ) | ||||||
| Other adjustments | (1.1 | ) | 0.5 | |||||||
| Pension expense (in excess of payments) | 1.6 | 3.4 | ||||||||
| Increase in receivables | (34.3 | ) | (27.7 | ) | ||||||
| Decrease (increase) in income tax receivables | 70.7 | (34.7 | ) | |||||||
| Decrease (increase) in inventories | 1.2 | (6.6 | ) | |||||||
| Decrease in prepaid expenses | 5.9 | 2.0 | ||||||||
| Decrease in accounts payable and accrued liabilities | (3.7 | ) | (15.7 | ) | ||||||
| Decrease in deferred income taxes | (22.1 | ) | (6.2 | ) | ||||||
| Net cash provided by (used in) operating activities | 2.3 | (108.6 | ) | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
| Property, plant, and equipment additions | (3.9 | ) | (36.8 | ) | ||||||
| Investments in and advances to joint ventures | (3.7 | ) | (4.7 | ) | ||||||
| Cash paid for purchase of investments | - | (102.0 | ) | |||||||
| Proceeds from sales of investments | 19.6 | 91.1 | ||||||||
| (Increase) decrease in restricted cash under letters of credit | 26.8 | (8.0 | ) | |||||||
| Other investing activities, net | 0.5 | 1.0 | ||||||||
| Net cash provided by (used in) investing activities | 39.3 | (59.4 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
| Borrowing of long term debt | 281.3 | 8.0 | ||||||||
| Repayment of long term debt | (126.6 | ) | (0.1 | ) | ||||||
| Payment of debt issuance fees | (14.5 | ) | - | |||||||
| Net borrowings under revolving credit lines and short term notes payable | - | 38.5 | ||||||||
| Payment of cash dividends | - | (15.4 | ) | |||||||
| Net cash provide by financing activities | 140.2 | 31.0 | ||||||||
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EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
0.4 | (3.4 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents | 182.2 | (140.4 | ) | |||||||
| Cash and cash equivalents at beginning of period | 97.7 | 352.1 | ||||||||
| Cash and cash equivalents at end of period | $ | 279.9 | $ | 211.7 | ||||||
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LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES SELECTED SEGMENT INFORMATION (Dollar amounts in millions) (Unaudited) |
||||||||||
| Dollar amounts in millions | Quarter Ended March 31, | |||||||||
| 2009 | 2008 | |||||||||
| Net sales: | ||||||||||
| OSB | $ | 72.3 | $ | 159.0 | ||||||
| Siding | 73.8 | 107.1 | ||||||||
| Engineered Wood Products | 30.0 | 60.5 | ||||||||
| Other | 28.5 | 22.8 | ||||||||
| $ | 204.6 | $ | 349.4 | |||||||
| Operating profit (loss): | ||||||||||
| OSB | $ | (24.2 | ) | $ | (62.1 | ) | ||||
| Siding | 2.1 | 0.3 | ||||||||
| Engineered Wood Products | (9.2 | ) | (8.1 | ) | ||||||
| Other | 1.6 | (2.3 | ) | |||||||
| Other operating credits and charges, net | 3.8 | 4.0 | ||||||||
| Gain (loss) on sales of and impairment of long-lived assets | (0.1 | ) | 0.4 | |||||||
| General corporate and other expenses, net | (19.1 | ) | (24.2 | ) | ||||||
| Foreign currency gain (losses) | 2.6 | 9.4 | ||||||||
| Gain on early debt extinguishment | 0.6 | 0.0 | ||||||||
| Other than temporary investment impairment | (0.9 | ) | (0.8 | ) | ||||||
| Investment income | 5.2 | 12.8 | ||||||||
| Interest expense, net of capitalized interest | (11.8 | ) | (11.2 | ) | ||||||
| Income (loss) from operations before taxes | (49.4 | ) | (81.8 | ) | ||||||
| Provision (benefit) for income taxes | (19.2 | ) | (35.9 | ) | ||||||
| Income (loss) from continuing operations | $ | (30.2 | ) | $ | (45.9 | ) | ||||
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LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES SUMMARY OF PRODUCTION VOLUMES |
||||||
| Quarter Ended March 31, | ||||||
| 2009 | 2008 | |||||
| Oriented strand board, million square feet 3/8" basis (1) | 421 | 1,077 | ||||
|
Oriented strand board, million square feet 3/8" basis (produced by wood-based siding mills) |
46 | 101 | ||||
| Wood-based siding, million square feet 3/8" basis | 187 | 220 | ||||
| Engineered I-Joist, million lineal feet (1) |
9 |
18 |
||||
| Laminated veneer lumber (LVL), thousand cubic feet |
667 |
1,423 |
||||
(1) Includes volumes produced by joint venture operations or under sales arrangements and sold to LP.
Source:
Louisiana-Pacific Corporation
Media Relations
Mary
Cohn, 615-986-5886
or
Investor Relations
Becky
Barckley/Mike Kinney, 615-986-5600