LP Reports Fourth Quarter and Year-end 2001 Results
PORTLAND, Ore.--(BUSINESS WIRE)--Jan. 29, 2002--Louisiana-Pacific Corporation (LP) (NYSE:LPX) today reported a fourth quarter net loss of $71 million, or $0.68 per diluted share on sales of $516 million.
In the fourth quarter of 2000, the net loss was $52 million, or $0.50 per diluted share on sales of $569 million. For the full year of 2001, LP reported a net loss of $172 million, or $1.64 per diluted share on sales of $2.4 billion compared to a net loss of $14 million, or $0.13 per diluted share on sales of $2.9 billion in 2000.
For the fourth quarter of 2001, results were a loss of $25 million, or $0.24 per share, excluding other operating credits and charges of $54 million ($33 million after tax or $0.32 per diluted share) and the non-cash charge associated with the write down on the investment in assets and liabilities transferred under contractual arrangement of $21 million ($13 million after tax or $0.12 per diluted share). Also included in fourth quarter results is a year-to-date tax benefit adjustment of $13 million or $0.13 per share. In the fourth quarter of 2000, LP's loss, excluding other operating credits and charges of $33 million ($20 million after tax or $0.20 per diluted share) and LP's share of a restructuring charge of an equity investment of $5 million ($3 million after tax or $0.03 per diluted share), was $28 million, or $0.27 per diluted share.
For the full year of 2001, results were a loss of $105 million or $1.00 per diluted share, excluding other operating credits and charges of $67 million ($41 million after tax or $0.39 per diluted share) and the non-cash charge associated with the write down on the investment in assets and liabilities transferred under contractual arrangement of $43 million ($26 million or $0.25 per diluted share). Sales declined in 2001 to $2.4 billion from $2.9 billion from the prior year due almost entirely to lower commodity pricing and LP's exit from the pulp business. For 2000, excluding other operating credits and charges of $71 million ($43 million after tax or $0.41 per diluted share) and LP's share of a restructuring charge of an equity investment of $5 million ($3 million after tax or $0.03 per share), LP's income was $32 million, or $0.31 per diluted share.
"Weak commodity pricing reduced our operating earnings by about $200 million in 2001 compared to the prior year," said Mark A. Suwyn, LP's chairman and CEO. "Fortunately, in our largest product line, oriented strand board, the low prices have accelerated substitution and there are early signs that supply and demand may come into better balance this year. Predicting exactly when those improved prices will become sustainable is difficult, but we do not see any significant new capacity coming on stream this year."
"In addition, our exit from the pulp business has been very costly with reported losses of over $100 million this year. We are no longer running any pulp mills and remaining exit costs, other than ongoing carrying costs, have been reserved," said Mr. Suwyn.
During the fourth quarter, LP responded to market conditions by curtailing production at a number of mills across all its businesses and indefinitely closing its Chetwynd pulp mill. Also, LP announced a corporate restructuring program targeted at significantly reducing selling and administrative expenses. These actions resulted in the elimination of more than 260 mid-to-upper level management positions that will reduce payroll costs by $18 million annually.
While noting that on-going industry consolidation and signs of an improving economy are positive for the industry, Suwyn cautioned that low pricing could continue for the next several months.
"Cost reduction and maximizing cash flow continue to be the primary focus of LP management," said Suwyn. "In 2001, despite the challenging environment, net cash flow for the year was approximately $25 million. The organization has demonstrated that it can weather down cycles and we expect to come out of the cycle stronger than ever."
LP is a premier supplier of building materials, delivering innovative, high-quality commodity and specialty products to its rapidly growing retail, wholesale, homebuilding and industrial customers. Visit LP's web site at www.lpcorp.com for additional information on the company.
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 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.
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
RECONCILIATION TO NET INCOME (LOSS)
(Dollar amounts in millions) (Unaudited)
Quarter Ended December 31,
----------------------------------------------
(Dollars in millions) 2001 2000
---------------------- ----------------------
Pre-Tax After-Tax Pre-Tax After-Tax
--------- ----------- --------- -----------
Income (loss) before
other operating items,
net and loss related
to assets and
liabilities transferred
under contractual
arrangement $ (25.3) $ (28.2)
----------- -----------
Additions to
environmental reserves $ (9.0) (5.5) $ (0.7) (0.4)
Additions to other
contingency reserve -- -- (7.0) (4.3)
Long-lived asset
impairment charges (34.5) (21.0) (11.2) (6.8)
Gain on sale of
pollution credits 4.6 2.8 -- --
Mark to market
adjustment on energy
contracts (6.3) (3.8) -- --
Severance costs (8.8) (5.4) (8.2) (5.0)
Other -- -- (6.0) (3.6)
--------- ----------- --------- -----------
Total other operating
credits and charges,
net $ (54.0) (32.9) $ (33.1) (20.1)
========= =========
Restructuring costs
associated with equity
in unconsolidated
subsidiary $ (5.3) (3.3)
=========
Write down on investment
in assets and liabilities
transferred under
contractual arrangement $ (20.7) (12.6) --
========= ----------- -----------
Net income (loss) $ (70.8) $ (51.6)
=========== ===========
Twelve Months Ended December 31,
----------------------------------------------
---------------------- ----------------------
2001 2000
---------------------- ----------------------
Pre-Tax After-Tax Pre-Tax After-Tax
--------- ----------- --------- -----------
Income (loss) before
other operating items,
net and loss related to
assets and liabilities
transferred under
contractual arrangement $ (104.8) $ 32.1
----------- -----------
Additions to
environmental reserves $ (9.0) (5.5) $ (5.8) (3.5)
Additions to other
contingency reserves (2.0) (1.2) (10.9) (6.6)
Long-lived asset
impairment charges (44.6) (27.1) (62.7) (37.8)
Gain on sale of
pollution credits 6.1 3.7 -- --
Gain on sale of assets -- -- 6.1 3.7
Mark to market adjustment
on interest rate hedge -- -- (11.4) (7.0)
Mark to market adjustment
on energy contracts (6.3) (3.8) -- --
Severance costs (9.4) (5.8) (8.2) (5.0)
Write off of equity
investment (2.0) (1.2) -- --
Gain on insurance
recovery -- -- 28.4 17.3
Other -- -- (6.0) (3.7)
--------- ----------- --------- -----------
Total other operating
credits and charges,
net $ (67.2) (40.9) $ (70.5) (42.6)
========= =========
Restructuring costs
associated with equity
in unconsolidated
subsidiary -- $ (5.3) (3.3)
=========
Write down on investment
in assets and liabilities
transferred under
contractual arrangement $ (42.5) (25.9) --
========= ----------- -----------
Net income (loss) $ (171.6) $ (13.8)
=========== ===========
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
CONDENSED INCOME STATEMENT
(Dollar amounts in millions, except per share amounts) (Unaudited)
Quarter Ended Twelve Months Ended
December 31, December 31,
--------- ---------- ---------- -----------
2001 2000 2001 2000
--------- ---------- ---------- -----------
Net sales $ 515.9 $ 568.9 $ 2,359.7 $ 2,932.8
Income (loss) before
taxes, minority interest
and equity in earnings
of unconsolidated
subsidiary $(140.6) $(119.1) $ (289.1) $ (14.8)
Net income (loss) $ (70.8) $ (51.6) $ (171.6) $ (13.8)
Income (loss) before
other operating items, net
and the loss related to
assets and liabilities
transferred under
contractual arrangement $ (25.3) $ (28.2) $ (104.8) $ 32.1
Net income (loss)
per share -- basic and
diluted $ (0.68) $ (0.50) $ (1.64) $ (0.13)
Income (loss) per share
before other operating
items, net and the loss
related to assets and
liabilities transferred
under contractual
arrangement $ (0.24) $ (0.27) $ (1.00) $ 0.31
Average shares outstanding:
Basic 104.4 104.2 104.4 104.1
Diluted 104.4 104.2 104.4 104.1
SALES BY QUARTER
1st 2nd 3rd 4th
-------- -------- -------- --------
2000 $ 829.7 $ 831.5 $ 702.7 $ 568.9
2001 $ 558.5 $ 649.8 $ 635.5 $ 515.9
NET INCOME (LOSS) BY QUARTER
1st 2nd 3rd 4th
-------- -------- -------- --------
2000 $ 57.7 $ 21.0 ($ 40.9) ($ 51.6)
2001 ($ 89.4) ($ 9.7) ($ 1.6) ($ 70.8)
NET INCOME (LOSS) PER SHARE BY QUARTER - BASIC AND DILUTED
1st 2nd 3rd 4th
-------- -------- -------- --------
2000 $ 0.55 $ 0.20 ($ 0.39) ($ 0.50)
2001 ($ 0.86) ($ 0.09) ($ 0.02) ($ 0.68)
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL DATA
(Dollar amounts in millions, except per share amounts) (Unaudited)
1. All sales figures for the first three quarters of 2000 have
been reclassified to conform with EITF 00-10 "Accounting for
Shipping and Handling Costs."
2. Results of operations for interim periods are not necessarily
indicative of results to be expected for an entire year.
3. Other Operating Credits and Charges, Net:
In the first quarter of 2000, LP recorded a $5.0 million
($3.1 million after taxes, or $0.03 per diluted share)
gain on an insurance recovery for siding related matters
and an impairment charge of $3.4 million ($2.1 million
after taxes, or $0.02 per diluted share) to reduce the
carrying value of a manufacturing facility to its
estimated net realizable value.
In the second quarter of 2000, LP recorded a net loss of
$38 million ($22.7 million after taxes, or $0.21 per
diluted share) primarily related to an impairment charge
to reduce the carrying value of the Samoa pulp mill to its
estimated net realizable value, an impairment charge at an
MDF facility, a mark to market charge on an interest rate
hedge and a gain on an insurance recovery for siding
related matters.
In the third quarter of 2000, LP recorded a gain on an
insurance recovery of $10.6 million ($6.4 million after
taxes, or $0.06 per diluted share) related to the 1999
fire at the Athens, Georgia OSB facility. LP also recorded
an other operating credit on the sale of the Mellen,
Wisconsin veneer facilities and a former plant site in
California that totaled $6.1 million ($3.7 million after
taxes, or $0.03 per diluted share). In addition, LP
recorded other operating charges relating to the
settlement of an interest rate hedge, additional
environmental reserves for sites in Quebec that were
acquired in 1999, additional reserves for non-product
litigation and impairment charges relating to several
facilities which will be permanently closed totaling $17.8
million ($10.7 million after taxes, or $0.10 per diluted
share).
In the fourth quarter of 2000, LP recorded a loss of $15.4
million ($9.4 million after taxes, or $0.09 per share)
associated with the permanent closure or planned sale of
several high-cost non-competitive mills. Additionally, LP
recorded impairment charges of $15.4 million ($9.4 million
after taxes, or $0.09 per share) related to other assets
held. LP also recorded $2.3 million ($1.3 million after
taxes, or $0.01 per share) of severance charges related to
a reorganization of administrative functions.
Also in the fourth quarter, LP recognized a loss of $5.3
million ($3.3 million after taxes, or $0.04 per share)
associated with its share of restructuring charges at
GreenFiber, the joint venture between LP and Casella Waste
Systems, Inc. This loss is reported on the line item
"Equity in (income) loss of unconsolidated subsidiary" in
LP's income statement.
In the first quarter of 2001, LP recorded a loss of $10.2
million ($6.2 million after taxes, or $0.06 per diluted
share) associated with impairment charges on assets held.
LP also recorded a net loss of $2 million ($1.2 million
after taxes, or $0.01 per diluted share) for additional
reserves for non-product litigation.
In the second quarter of 2001, LP recorded a loss of $2.0
million ($1.2 million after taxes, or $0.01 per diluted
share) associated with the impairment of an equity
investment.
In the third quarter of 2001, LP recorded a gain of $1.5
million ($0.9 million after taxes, or $0.01 per diluted
share) from the sale of pollution credits associated with
closed mills. LP also recorded severance charges of $0.5
million ($0.3 million after tax, or $0.0 per diluted
share) associated with certain corporate restructurings.
In the fourth quarter of 2001, LP recorded other operating
credits and charges of $54 million ($32.9 million after
tax or $0.32 per diluted share). Included in this number,
LP recorded a charge of $37.8 million ($23.1 million after
taxes, or $0.22 per share) associated with the impairment,
severance and environmental expenses due to the indefinite
closure of the Chetwynd pulp mill. Additionally, LP
recorded impairment charges of $10 million ($6.0 million
after taxes, or $0.06 per share) related to other assets
held. LP also recorded $4.7 million ($2.9 million after
taxes, or $0.03 per share) of severance charges related to
certain corporate restructurings. LP also recorded a gain
of $4.6 million ($2.8 million after taxes, or $0.03 per
diluted share) from the sale of pollution credits
associated with closed mills. Due to the recent bankruptcy
filing of Enron, LP was required to record a
mark-to-market adjustment on several energy contracts of
$6.1 million ($3.7 million or $0.04 per diluted share) as
future physical delivery of the energy was no longer
deemed probable.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions, except per share amounts) (Unaudited)
Quarter Ended Twelve Months Ended
December 31, December 31,
-------------------- ----------------------
2001 2000 2001 2000
--------- -------- --------- ---------
Net sales $ 515.9 $ 568.9 $ 2,359.7 $ 2,932.8
--------- -------- --------- ---------
Operating costs and
expenses:
Cost of sales 487.6 537.5 2,122.1 2,362.6
Depreciation,
amortization and
depletion 46.7 51.4 195.2 235.5
Selling and
administrative 34.5 57.5 164.4 234.7
Other operating
credits and charges,
net 54.0 33.1 67.2 70.5
Loss related to assets
and liabilities
transferred under
contractual arrangement 20.7 -- 42.5 --
--------- -------- --------- ----------
Total operating costs
and expenses 643.5 679.5 2,591.4 2,903.3
--------- -------- --------- ----------
Income (loss) from
operations (127.6) (110.6) (231.7) 29.5
--------- -------- --------- ----------
Non-operating income (expense):
Interest expense (26.8) (22.8) (95.6) (81.0)
Interest income 11.3 9.5 35.8 37.9
Foreign exchange
gains (losses) 2.5 4.8 2.4 (1.2)
--------- -------- --------- ----------
Total non-operating
income (expense) (13.0) (8.5) (57.4) (44.3)
--------- -------- --------- ----------
Income (loss) before
taxes, minority interest
and equity in earnings
of unconsolidated
subsidiary (140.6) (119.1) (289.1) (14.8)
Provision (benefit) for
income taxes (67.9) (72.5) (112.4) (8.1)
Minority interest in net
income (loss) of
consolidated subsidiaries (1.2) (0.7) (5.1) --
Equity in (income) loss of
unconsolidated subsidiary (0.7) 5.7 -- 7.1
--------- -------- --------- ----------
Net income (loss) $ (70.8) $ (51.6) $ (171.6) $ (13.8)
========= ======== ========= ==========
Net income (loss)
per share -- basic and
diluted $ (0.68) $ (0.50) $ (1.64) $ (0.13)
========= ======== ========= ==========
Average shares
outstanding (millions)
-- basic 104.4 104.2 104.4 104.1
========= ======== ========= ==========
diluted 104.4 104.2 104.4 104.1
========= ======== ========= ==========
Cash dividends per share $ -- $ 0.14 $ 0.24 $ 0.56
========= ======== ========= ==========
CONDENSED CONSOLIDATED BALANCE SHEETS
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions) (Unaudited)
December 31, December 31,
2001 2000
---------------- ----------------
ASSETS
Cash and cash equivalents $ 61.6 $ 38.1
Accounts receivable, net 118.3 129.6
Inventories 213.2 327.5
Prepaid expenses 21.1 22.8
Income taxes receivable 37.5 91.5
Deferred income taxes 41.4 44.6
---------------- ----------------
Total current assets 493.1 654.1
Timber and timberlands 563.1 590.6
Property, plant and equipment 2,355.3 2,562.8
Accumulated depreciation (1,221.9) (1,254.0)
---------------- ----------------
Net property, plant and equipment 1,133.4 1,308.8
Goodwill, net of amortization 298.3 326.3
Notes receivable from asset sales 403.8 403.8
Assets transferred under contractual
arrangement 29.1 --
Other assets 96.0 91.1
---------------- ----------------
Total assets $ 3,016.8 $ 3,374.7
================ ================
LIABILITIES AND EQUITY
Current portion of long-term
debt $ 37.7 $ 39.4
Accounts payable and accrued
liabilities 251.8 303.8
Current portion of contingency
reserves 20.0 35.0
---------------- ----------------
Total current liabilities 309.5 378.2
Long-term debt, excluding current portion:
Limited recourse notes
payable 396.5 396.5
Other long term debt 755.5 787.3
---------------- ----------------
Total long-term debt,
excluding current portion 1,152.0 1,183.8
Contingency reserves, excluding
current portion 135.1 126.6
Liabilities transferred under
contractual arrangement 14.0 --
Deferred income taxes and other 325.3 390.9
Commitments and contingencies
Stockholders' equity:
Common stock 117.0 117.0
Additional paid-in capital 440.8 440.2
Retained earnings 807.6 1,004.3
Treasury stock (230.6) (235.1)
Accumulated comprehensive
loss (53.9) (31.2)
---------------- ----------------
Total stockholders'
equity 1,080.9 1,295.2
---------------- ----------------
Total liabilities and
equity $ 3,016.8 $ 3,374.7
================ ================
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions) (Unaudited)
Twelve Months Ended
December 31,
-------------------------
2001 2000
---------- ----------
Cash flows from operating activities:
Net loss $ (171.6) $ (13.8)
Depreciation, amortization and depletion 195.2 235.5
Other operating credits and charges, net 63.9 85.6
Cash settlements of contingencies (35.3) (162.4)
Cash receipts on contingencies 17.7 --
Loss on assets and liabilities transferred
under contractual arrangement 42.5 --
Other adjustments (3.4) 14.5
Decrease (increase) in certain working
capital components and deferred taxes 42.0 (76.9)
---------- ----------
Net cash provided by operating activities 151.0 82.5
Cash flows from investing activities:
Capital spending (74.7) (220.3)
Proceeds from assets sales and transfers 45.2 20.5
Business asset purchases, including
replacement of debt (6.9) (54.7)
Other investing activities, net (0.4) (6.6)
---------- ----------
Net cash used in investing activities (36.8) (261.1)
Cash flows from financing activities:
New borrowings, including net increase in
revolving borrowings 174.0 667.6
Repayment of long-term debt (207.5) (502.4)
Cash dividends (25.1) (58.3)
Increase in receivables from assets and
liabilities transferred under contractual
arrangement (15.1) --
Purchase of treasury stock -- (11.3)
Other financing activities (17.0) 5.1
---------- ----------
Net cash provided by (used in)
financing activities (90.7) 100.7
Net increase (decrease) in cash and cash
equivalents 23.5 (77.9)
Cash and cash equivalents at beginning of
period 38.1 116.0
---------- ----------
Cash and cash equivalents at end of period $ 61.6 $ 38.1
========== ==========
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(Dollar amounts in millions) (Unaudited)
Quarter Ended Twelve Months Ended
December 31, December 31,
----------------------- ----------------------------
2001 2000 % 2001 2000 %
change change
-------- -------- ---- --------- --------- ------
Sales:
Structural
products $ 357.5 $ 352.1 2 $ 1,519.8 $ 1,817.1 (16)
Exterior
products 68.5 62.0 10 358.6 328.7 9
Industrial
panel products 44.3 60.4 (27) 198.5 287.4 (31)
Other products 44.3 65.0 (32) 234.8 348.1 (33)
Pulp 1.3 29.4 (96) 48.0 151.5 (68)
-------- -------- --------- ---------
Total sales $ 515.9 $ 568.9 (9) $ 2,359.7 $ 2,932.8 (20)
======== ======== ========= =========
Operating profit (loss):
Structural
products $ (27.1) $ (30.0) 10 $ (0.9) $ 176.1 (101)
Exterior
products (0.5) (7.6) 93 15.7 19.2 (18)
Industrial panel
products (3.5) (4.5) 22 (19.4) 1.8 (1178)
Other products 2.7 (4.3) 163 (1.7) (12.0) 86
Pulp (3.3) (2.5) (32) (27.3) 12.8 (313)
Other operating
credits and
charges, net (54.0) (33.1) (63) (67.2) (70.5) 5
Loss related to
assets and
liabilities
transferred
under contractual
arrangement (20.7) -- (42.5) --
General corporate
and other
expenses, net (18.7) (23.8) 21 (86.0) (99.1) 13
Interest income
(expense), net (15.5) (13.3) (17) (59.8) (43.1) (39)
-------- -------- --------- ---------
Income (loss)
before taxes,
minority interest
and equity in
earnings of
unconsolidated
subsidiary $(140.6) $(119.1) (18) $(289.1) $ (14.8) (1853)
======== ======== ========= ==========
LOUISIANA-PACIFIC CORPORATION
SUMMARY OF PRODUCTION VOLUMES
Quarter Ended Year Ended
December 31, December 31,
----------------- ----------------
2001 2000 2001 2000
-------- -------- -------- -------
Oriented strand board, million
square feet 3/8" basis 1,203 1,262 5,240 5,396
Softwood plywood, million
square feet 3/8" basis 194 243 809 1,046
Lumber, million board feet 241 238 966 993
Wood-based siding, million
square feet 3/8" basis 178 152 733 651
Industrial panel products
(particleboard, medium density
fiberboard and hardboard),
million square feet 3/4" basis 132 133 488 637
Engineered I-Joist, million
lineal feet 13 14 71 70
Laminated veneer lumber (LVL),
thousand cubic feet 1,237 1,279 6,923 7,008
Pulp, thousand short tons -- 91 62 373
| CONTACT: | Louisiana-Pacific |
|---|---|
| David Dugan, 503/821-5285 (Media Relations) | |
| or | |
| Bill Hebert, 503/821-5100 (Investor Relations) | |