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LP Building Solutions Reports Second Quarter 2023 Results, Provides Capital Allocation Update, and Outlook

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Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported its financial results for the second quarter of 2023, with Siding Solutions net sales decreasing by 11% and Oriented Strand Board (OSB) net sales decreasing by 66%. Adjusted EBITDA was $93 million, a decrease of $398 million, and adjusted diluted EPS was $0.55 per share, a decrease of $3.64 per share. LP also provided a capital allocation update, declaring a quarterly cash dividend of $0.24 per share and having cash and cash equivalents of $71 million as of June 30, 2023.
Positive
  • LP's strategy positions them well for long-term growth as the housing outlook improves
  • Adjusted EBITDA of $93 million shows the company's ability to operate with exceptional safety and efficiency
Negative
  • Siding Solutions and OSB net sales decreased by 11% and 66% respectively
  • Adjusted diluted EPS decreased by $3.64 per share

NASHVILLE, Tenn., Aug. 2, 2023 /PRNewswire/ -- Louisiana-Pacific Corporation (LP) (NYSE: LPX), a leading manufacturer of high-performance building products, today reported its financial results for the three and six months ended June 30, 2023.

Key Highlights for Second Quarter 2023, Compared to Second Quarter 2022

  • Siding Solutions net sales decreased by 11% to $318 million on lower volumes partially offset by higher prices
  • Oriented Strand Board (OSB) net sales decreased by 66% to $229 million, primarily due to lower prices
  • Consolidated net sales decreased by 46% to $611 million
  • Income (loss) attributed to LP from continuing operations decreased by $367 million to $(20) million (or $(0.28) per diluted share) due in part to one-time charges detailed below
  • Adjusted EBITDA(1) was $93 million, a decrease of $398 million
  • Adjusted Diluted EPS(1) was $0.55 per share, a decrease of $3.64 per share
  • Cash provided by operating activities was $88 million

(1)

This is a non-GAAP financial measure. See "Use of Non-GAAP Information", "Reconciliation of Net Income to Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Income, and Non-GAAP Adjusted Diluted EPS" below.

Capital Allocation Update

  • Paid $80 million to acquire Wawa facility assets
  • Paid $74 million in capital expenditures during the second quarter
  • Paid $17 million in cash dividends during the second quarter
  • Declared a quarterly cash dividend of $0.24 per share
  • Amended Credit Facility balance of $30 million as of June 30, 2023
  • Cash and cash equivalents of $71 million as of June 30, 2023
  • Availability of $200 million remaining under the 2022 Share Repurchase Program

"LP earned $93 million in EBITDA in the quarter while operating with exceptional safety and efficiency," said Brad Southern, Chair & Chief Executive Officer. "As the housing outlook continues to improve, I am confident that LP's strategy positions us well for long-term growth."

Outlook

Our guidance is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks, including those set forth below under "Forward-Looking Statements."

  • Siding Solutions full year 2023 revenue is expected to decrease year-over-year by approximately 10%
  • OSB third quarter 2023 revenue is expected to be sequentially higher than the second quarter 2023 by at least 50%, assuming that OSB prices published by Random Lengths remain unchanged from those published on July 28, 2023 (this is an assumption for modeling purposes and not a price forecast)
  • Under these assumptions, third quarter 2023 Adjusted EBITDA(2) is expected to be in the range of $160 million and $180 million
  • Given our current outlook, capital expenditures for 2023 are expected to be in the range of $290 million to $310 million, including $120 million to $130 million for mill conversions, $120 million to $125 million for sustaining maintenance, and $50 million to $55 million for other strategic growth projects

(2)

This is a non-GAAP financial measure. With respect to Adjusted EBITDA for the second quarter of 2023, certain items that affect net income on a GAAP basis, such as business exit charges, product-line discontinuance charges, other operating credits and charges, net, loss on early debt extinguishment, investment income, and other non-operating items, that would be required to be included in the comparable forecasted GAAP measures cannot be reasonably predicted at this time, and LP is unable to quantify such amounts that would be required to be included in the comparable forecasted GAAP measures, without unreasonable effort. As such, the Company is unable to provide a reasonable estimate of GAAP net income, or a corresponding reconciliation of Adjusted EBITDA to net income.

Second Quarter 2023 Highlights

Net sales for the second quarter of 2023 decreased year-over-year by $519 million (or 46%). This included a decrease in OSB segment revenue of $444 million or 66%, driven by 57% lower average selling prices and 21% lower volumes. Siding segment revenue decreased $37 million or 10%, due to 16% lower volume offset by 6% higher prices. The remaining decrease in net sales was related to decreases in South America segment and other revenue of $18 million and $20 million, respectively.

Income (loss) attributed to LP from continuing operations for the second quarter of 2023 decrease year-over-year by $367 million (or 106%) to $(20) million, or $(0.28) per diluted share. This primarily reflects a $398 million decrease in Adjusted EBITDA, $34 million of business exit charges (of which, $30 million were non-cash charges) related to an off-site framing operation (Entekra Holdings, LLC), and $16 million of settlements of OSB patent-related claims, partially offset by a $95 million lower income tax provision.

First Six Months of 2023 Highlights

Net sales for the first six months of 2023 decreased year-over-year by $1,102 million (or 48%). This included a decrease in OSB revenue of $998 million or 70%, due to 61% lower prices and 24% lower volume. Siding segment revenue decreased $38 million or 5%, due to 13% lower volume offset by 8% higher prices. The remaining decrease in net sales was related to decreases in South America segment and other revenue of $29 million and $38 million, respectively.

Income attributed to LP from continuing operations for the first six months of 2023 decreased year-over-year by $768 million (or 100%) to $1 million, or $0.02 per diluted share. The decrease primarily reflects a $930 million decrease in Adjusted EBITDA, $34 million of business exit charges (of which, $30 million were non-cash charges) related to an off-site framing operation (Entekra Holdings, LLC), and $16 million of settlements of OSB patent-related claims, partially offset by a $218 million lower income tax provision.

Segment Results

Siding

The Siding segment serves diverse end markets with a broad product offering of engineered wood siding, trim, and fascia, including LP® SmartSide® Trim & Siding, LP® SmartSide® ExpertFinish® Trim & Siding, LP BuilderSeries® Lap Siding, and LP® Outdoor Building SolutionsTM (collectively referred to as Siding Solutions).

Segment sales and Adjusted EBITDA for this segment were as follows (dollar amounts in millions):


Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


% Change


2023


2022


% Change

Net sales

$            320


$            358


(10) %


$            651


$            689


(5) %

Adjusted EBITDA

59


78


(24) %


126


160


(21) %

 


Three Months Ended June 30, 2023
versus 2022


Six Months Ended June 30, 2023
versus 2022


Average Net

Selling Price


Unit

Shipments


Average Net

Selling Price


Unit

Shipments

Siding Solutions

6 %


(16) %


8 %


(13) %

The effects of list price increases drove year-over-year increases in the average net selling price for the three and six months ended June 30, 2023. The volume decreases for the three and six months ended June 30, 2023 were driven by challenging new and existing home selling markets and elevated levels of channel inventory compared to the prior periods.

Adjusted EBITDA decreased year-over-year by $19 million in the second quarter of 2023, reflecting the net impact of lower volumes, $6 million of raw material inflation, and $6 million of discretionary investments in support of future growth, including siding mill conversions and sales and marketing costs, partially offset by higher average selling prices. The year-over-year decrease in Adjusted EBITDA of $34 million for the six months ended June 30, 2023, reflects the net impact of lower volumes, $20 million of raw material inflation, and $9 million of discretionary investments in support of future growth, including siding mill conversions and sales and marketing costs, partially offset by higher average selling prices.

Oriented Strand Board (OSB)

The OSB segment manufactures and distributes OSB structural panel products including our value-added OSB portfolio known as LP® Structural Solutions (which includes LP® TechShield® Radiant Barrier, LP WeatherLogic® Air & Water Barrier, LP Legacy® Premium Sub-Flooring, LP NovaCore® Thermal Insulated Sheathing, LP® FlameBlock® Fire-Rated Sheathing), and LP® TopNotch® Sub-Flooring). OSB is manufactured using wood strands arranged in layers and bonded with resins.

Segment sales and Adjusted EBITDA for this segment were as follows (dollar amounts in millions):


Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


% Change


2023


2022


% Change

Net sales

$            229


$            673


(66) %


$            418


$         1,417


(70) %

Adjusted EBITDA

37


403


(91) %


42


908


(95) %

 


Three Months Ended June 30, 2023 
versus 2022


Six Months Ended June 30, 2023 
versus 2022


Average Net

Selling Price


Unit

Shipments


Average Net

Selling Price


Unit

Shipments

OSB - Structural Solutions

(59) %


(20) %


(58) %


(29) %

OSB - Commodity

(55) %


(23) %


(66) %


(18) %

The year-over-year net sales decrease of $444 million for the three months ended June 30, 2023 reflects a $368 million decrease in OSB prices, a $33 million decrease in sales volume from production curtailments, and a $28 million decrease related to production volume from the conversion of our Sagola, Michigan mill to siding production. The year-over-year net sales decrease of $998 million for the six months ended June 30, 2023 reflects an $838 million decrease in OSB prices, an $84 million decrease in sales volume from production curtailments, and a $55 million decrease related in production volume from the conversion of the Sagola mill to siding production.

The year-over-year decreases in Adjusted EBITDA of $366 million and $866 million for the three and six months ended June 30, 2023, respectively, reflects lower OSB prices and sales volumes (as described above), partially offset by lower mill-related costs.

South America

LP's South America segment manufactures and distributes OSB structural panel and siding products in South America and certain export markets. This segment has manufacturing operations in two countries, Chile and Brazil, and operates sales offices in Chile, Brazil, Peru, Colombia, Argentina, Paraguay, and Mexico.

Segment sales and Adjusted EBITDA for this segment were as follows (dollar amounts in millions):


Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


% Change


2023


2022


% Change

Net sales

$              53


$              70


(25) %


$            108


$            137


(21) %

Adjusted EBITDA

13


26


(52) %


24


51


(53) %

 


Three Months Ended June 30, 2023 
versus 2022


Six Months Ended June 30, 2023 
versus 2022


Average Net

Selling Price


Unit

Shipments


Average Net

Selling Price


Unit

Shipments

OSB - Structural Solutions

(17) %


(15) %


(14) %


(13) %

Siding

20 %


(17) %


— %


18 %

South America net sales decreased year-over-year by $18 million and $29 million for the three and six months ended June 30, 2023, respectively, predominantly driven by lower OSB sales volumes and average selling prices. 

The year-over-year decrease in Adjusted EBITDA of $14 million and $27 million for the three and six months ended June 30, 2023, respectively, reflects the lower sales volumes and average selling prices (described above) as well as higher raw material costs.

Conference Call

LP will hold a conference call to discuss this release today at 11 a.m. Eastern Time (8 a.m. Pacific Time). Investors will have the opportunity to listen to the conference call live by going to investor.lpcorp.com and clicking "Events Calendar" at least 15 minutes early to register and download and install any necessary audio software. For those who cannot listen to the live broadcast, the recorded webcast and accompanying presentation will be available to the public online in the "Past Events" section of investor.lpcorp.com.

About LP Building Solutions

As a leader in high-performance building solutions, Louisiana-Pacific Corporation (LP Building Solutions, NYSE: LPX) manufactures engineered wood building products that meet the demands of builders, remodelers, and homeowners worldwide. LP's extensive offerings include innovative and dependable building products and accessories, such as Siding Solutions (LP® SmartSide® Trim & Siding, LP® SmartSide® ExpertFinish® Trim & Siding, LP BuilderSeries® Lap Siding, and LP® Outdoor Building SolutionsTM), LP® Structural Solutions (LP® TechShield® Radiant Barrier, LP WeatherLogic® Air & Water Barrier, LP Legacy® Premium Sub-Flooring, LP® FlameBlock® Fire-Rated Sheathing, LP NovaCoreTM Thermal Insulated Sheathing, and LP® TopNotch® 350 Durable Sub-Flooring), and oriented strand board (OSB). In addition to product solutions, LP provides industry-leading customer service and warranties. Since its founding in 1972, LP has been Building a Better World™ by helping customers construct beautiful, durable homes while our stockholders build lasting value. Headquartered in Nashville, Tennessee, LP operates 22 plants across the U.S., Canada, Chile, and Brazil. For more information, visit LPCorp.com.

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. These statements are based upon the beliefs and assumptions of, and on information available to, our management; assumptions upon which such forward-looking statements are based are also forward-looking statements. Forward-looking statements can be identified by words such as "may," "will," "could," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "potential," "continue," "likely," or "future" or the negative or other variations thereof and include other statements regarding matters that are not historical facts. Examples of forward-looking statements include, among others, statements LP makes regarding plans for product development, forecasts of future costs and expenditures, possible outcomes of legal proceedings, capacity expansion, and other growth initiatives, and the adequacy of reserves for loss contingencies. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following: changes in governmental fiscal and monetary policies, including tariffs and levels of employment; changes in general and global economic conditions, including impacts from global pandemics, rising inflation, supply chain disruptions, and the ongoing military conflict between Russia and Ukraine; changes in the cost and availability of capital; changes in the level of home construction and repair and remodel activity; changes in competitive conditions and prices for our products; changes in the relationship between supply of and demand for building products; changes in the financial or business conditions of third-party wholesale distributors and dealers; changes in the relationship between the supply of and demand for raw materials, including wood fiber and resins, used in manufacturing our products; changes in the cost and availability of energy, primarily natural gas, electricity, and diesel fuel; changes in the cost and availability of transportation; impact of manufacturing our products internationally; difficulties in the launch or production ramp-up of newly introduced products; impacts from public health issues (including global pandemics) on the economy, demand for our products or our operations, including the actions and recommendations of governmental authorities to contain such public health issues; unplanned interruptions to our manufacturing operations, such as explosions, fires, inclement weather, natural disasters, accidents, equipment failures, labor shortages or disruptions, transportation interruptions, supply interruptions, public health issues (including pandemics and quarantines), riots, civil insurrection or social unrest, looting, protests, strikes, and street demonstrations; changes in other significant operating expenses; changes in currency values and exchange rates between the U.S. dollar and other currencies, particularly the Canadian dollar, Brazilian real, and Chilean peso; changes in, and compliance with, general and industry-specific laws and regulations, including environmental and health and safety laws and regulations, the U.S. Foreign Corrupt Practices Act and anti-bribery laws, laws related to our international business operations, and changes in building codes and standards; changes in tax laws and interpretations thereof; changes in circumstances giving rise to environmental liabilities or expenditures; warranty costs exceeding our warranty reserves; challenges to or exploitation of our intellectual property or other proprietary information by others in the industry; the resolution of existing and future product-related litigation, environmental proceedings and remediation efforts, and other legal or environmental proceedings or matters; the effect of covenants and events of default contained in our debt instruments; the amount and timing of any repurchases of our common stock and the payment of dividends on our common stock, which will depend on market and business conditions and other considerations; cybersecurity events affecting our information technology systems or those of our third-party providers and the related costs and impact of any disruption on our business; and acts of public authorities, war, political or civil unrest, natural disasters, fire, floods, earthquakes, inclement weather, and other matters beyond our control. For additional information about factors that could cause actual results, events, and circumstances to differ materially from those described in the forward-looking statements, please refer to LP's filings with the Securities and Exchange Commission (SEC). We urge you to consider all of the risks, uncertainties, and factors identified above or discussed in such reports carefully in evaluating the forward-looking statements in this news release. We cannot assure you that the results reflected in or implied by any forward-looking statement will be realized or even if substantially realized, that those results will have the forecasted or expected consequences and effects for or on our operations or financial performance. The forward-looking statements made today are as of the date of this news release. Except as required by law, LP undertakes no obligation to update any such forward-looking statements to reflect new information, subsequent events, or circumstances.

Use of Non-GAAP Information

In evaluating our business, we utilize non-GAAP financial measures that fall within the meaning of SEC Regulation G and Regulation S-K Item 10(e), which we believe provide users of the financial information with additional meaningful comparison to prior reported results. Non-GAAP financial measures do not have standardized definitions and are not defined by U.S. generally accepted accounting principles (GAAP). In this press release, we disclose income (loss) attributed to LP from continuing operations before interest expense, provision for income taxes, depreciation and amortization, and excluding stock-based compensation expense, loss on impairment attributed to LP, business exit charges, product-line discontinuance charges, other operating credits and charges, net, loss on early debt extinguishment, investment income, pension settlement charges, and other non-operating items, as Adjusted EBITDA from continuing operations (Adjusted EBITDA), which is a non-GAAP financial measure. We have included Adjusted EBITDA in this report because we view it as an important supplemental measure of our performance and believe that it is frequently used by interested persons in the evaluation of companies that have different financing and capital structures and/or tax rates. We also disclose income (loss) attributed to LP from continuing operations, excluding loss on impairment attributed to LP, business exit charges, product-line discontinuance charges, interest expense outside of normal operations, other operating credits and charges, net, loss on early debt extinguishment, gain (loss) on acquisition, and pension settlement charges, and adjusting for a normalized tax rate as Adjusted Income (Adjusted Income). We also disclose Adjusted Diluted EPS, which is calculated as Adjusted Income divided by diluted shares outstanding. We believe that Adjusted Diluted EPS and Adjusted Income are useful measures for evaluating our ability to generate earnings and that providing these measures should allow interested persons to more readily compare the earnings for past and future periods.

Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS are not substitutes for the U.S. GAAP measures of Net income (loss), Income (loss) attributed to LP from continuing operations, and Income (loss) attributed to LP from continuing operations per diluted share or for any other U.S. GAAP measures of operating performance. It should be noted that other companies may present similarly titled measures differently, and therefore, as presented by us, these measures may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS have material limitations as performance measures because they exclude items that are actually incurred or experienced in connection with the operation of our business.

During the three months ended June 30, 2023, we updated our definition of Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS to exclude other business exit charges not classified as discontinued operations. Business exit charges consist of inventory and other asset impairment and exit charges related to the exit of other businesses not individually significant. We consider business exit charges to be outside the performance of our ongoing core business operations and believe that presenting Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS excluding business exit charges provides increased transparency as to the operating costs of our current business performance. We did not revise prior years' Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS amounts because there were no significant costs similar in nature to these items.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)



Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


2023


2022

Net sales

$                611


$             1,130


$             1,195


$             2,297

Cost of sales

(492)


(611)


(975)


(1,158)

Gross profit

119


518


220


1,139

Selling, general, and administrative expenses

(66)


(67)


(133)


(129)

Impairment of long-lived assets, net

(24)



(24)


Other operating credits and charges, net

(21)


11


(26)


10

Income from operations

8


462


37


1,019

Interest expense

(3)


(3)


(6)


(6)

Investment income

2


2


7


3

Other non-operating items

(8)


2


(16)


(8)

Income (loss) before income taxes

(1)


463


22


1,007

Provision for income taxes

(21)


(116)


(22)


(240)

Equity in unconsolidated affiliate

1


1


1


2

Income (loss) from continuing operations

(21)


348


1


769

Income from discontinued operations, net of income taxes


37



$                  99

Net income (loss)

$                (21)


$                385


$                    1


$                868

Net loss attributed to non-controlling interest

1




1

Net income (loss) attributed to LP

$                (20)


$                384


$                    1


$                868









Net income (loss) attributed to LP per share of common stock:








Income (loss) per share continuing operations - basic

$             (0.28)


$               4.30


$               0.02


$               9.25

Income per share discontinued operations - basic


0.46



1.18

Net income (loss) attributed to LP per share - basic

$             (0.28)


$               4.76


$               0.02


$             10.43









Income (loss) per share continuing operations - diluted

$             (0.28)


$               4.28


$               0.02


$               9.19

Income per share discontinued operations - diluted


0.45



1.18

Net income (loss) attributed to LP per share - diluted

$             (0.28)


$               4.73


$               0.02


$             10.36









Average shares of common stock used to compute Net income (loss) per share:








Basic

72


81


72


83

Diluted

72


81


72


84

 

CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(DOLLAR AMOUNTS IN MILLIONS)



June 30, 2023


December 31, 2022

ASSETS




Cash and cash equivalents

$                            71


$                        369

Receivables

172


127

Inventories

407


337

Prepaid expenses and other current assets

21


20

Total current assets

671


854





Timber and timberlands

32


40

Property, plant, and equipment, net

1,504


1,326

Operating lease assets

31


44

Goodwill and other intangible assets

27


36

Investments in and advances to affiliates

6


6

Restricted cash


14

Other assets

24


24

Deferred tax asset

8


7

Total assets

$                       2,302


$                     2,350





LIABILITIES AND EQUITY




Accounts payable and accrued liabilities

$                          262


$                        317

Income tax payable

5


19

Total current liabilities

267


336





Long-term debt

377


346

Deferred income taxes

127


113

Non-current operating lease liabilities

33


41

Other long-term liabilities

54


53

Contingency reserves, excluding current portion

26


26

Total liabilities

883


916





Redeemable noncontrolling interest






Stockholders' equity:




Common stock

88


88

Additional paid-in capital

458


462

Retained earnings

1,337


1,371

Treasury stock

(387)


(388)

Accumulated comprehensive loss

(78)


(99)

Total stockholders' equity

1,419


1,433

Total liabilities and stockholders' equity

$                       2,302


$                     2,350

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(DOLLAR AMOUNTS IN MILLIONS)



Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


2023


2022

CASH FLOWS FROM OPERATING ACTIVITIES








Net income (loss)

$            (21)


$            385


$                1


$            868

Adjustments to net income:








Depreciation and amortization

29


33


57


65

Impairment of goodwill and long-lived assets

24



24


Gain on sale of assets, net




(39)

Pension loss due to settlement



6


Deferred taxes

12


16


10


27

Other adjustments, net

32


7


41


12

Changes in assets and liabilities (net of acquisitions and divestitures):








Receivables

(14)


61


(22)


(66)

Inventories

8


12


(68)


(43)

Prepaid expenses and other current assets

2


(14)


(1)


(11)

Accounts payable and accrued liabilities

21


34


(45)


31

Income taxes payable, net of receivables

(3)


(51)


(33)


65

Net cash (used) provided by operating activities

88


483


(30)


908

CASH FLOWS FROM INVESTING ACTIVITIES:








Property, plant, and equipment additions

(74)


(103)


(188)


(196)

Acquisition of facility assets

(80)



(80)


Proceeds from sales of assets



1


Proceeds from divestiture of business




59

Other investing activities, net

(4)


1


(4)


2

Net cash used in investing activities

(158)


(102)


(271)


(135)

CASH FLOWS FROM FINANCING ACTIVITIES:








Borrowing of long-term debt

70



70


Repayment of long-term debt

(40)



(40)


Payment of cash dividends

(17)


(18)


(35)


(37)

Purchase of stock


(471)



(575)

Other financing activities

1



(9)


(15)

Net cash provided by (used in) financing activities

14


(489)


(14)


(626)

EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH


(13)


3


(2)

Net (decrease) increase in cash, cash equivalents, and restricted cash

(56)


(121)


(313)


145

Cash, cash equivalents, and restricted cash at beginning of period

126


637


383


371

Cash, cash equivalents, and restricted cash at end of period

$              71


$            516


$              71


$            516

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS

The following tables set forth: (1) housing starts, (2) our North American sales volume, and (3) Overall Equipment Effectiveness (OEE). We consider these items to be key performance indicators because LP's management uses these metrics to evaluate our business and trends, measure our performance, and make strategic decisions, and believes that the key performance indicators presented provide additional perspective and insights when analyzing the core operating performance of LP. These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the U.S. GAAP financial measures presented herein. These measures may not be comparable to similarly-titled performance indicators used by other companies.

We monitor housing starts, which is a leading external indicator of residential construction in the United States that correlates with the demand for many of our products. We believe that this is a useful measure for evaluating our results and that providing this measure should allow interested persons to more readily compare our sales volume for past and future periods to an external indicator of product demand. Other companies may present housing start data differently and therefore, as presented by us, our housing start data may not be comparable to similarly-titled indicators reported by other companies.

The following table sets forth housing starts for the three and six months ended June 30, 2023 and 2022:


Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


2023


2022

Housing starts1:








Single-Family

261


303


450


570

Multi-Family

138


147


264


270


399


450


714


840


1Actual U.S. housing starts data reported by U.S. Census Bureau as published through July 19, 2023.

We monitor sales volumes for our products in our Siding, OSB and South America segments, which we define as the number of units of our products sold within the applicable period. Evaluating sales volume by product type helps us identify and address changes in product demand, broad market factors that may affect our performance, and opportunities for future growth. It should be noted that other companies may present sales volumes differently and, therefore, as presented by us, sales volumes may not be comparable to similarly-titled measures reported by other companies. We believe that sales volumes can be a useful measure for evaluating and understanding our business.

The following table sets forth sales volumes for the three and six months ended June 30, 2023 and 2022:


Three Months Ended June 30, 2023


Three Months Ended June 30, 2022

Sales Volume

Siding

OSB

South
America

Total


Siding

OSB

South
America

Total

Siding Solutions (MMSF)

377

7

384


448

9

457

OSB - Structural Solutions (MMSF)

412

128

540


514

149

664

OSB - commodity (MMSF)

354

354


460

460












Six Months Ended June 30, 2023


Six Months Ended June 30, 2022

Sales Volume

Siding

OSB

South
America

Total


Siding

OSB

South
America

Total

Siding Solutions (MMSF)

760

19

779


869

16

885

OSB - value added (MMSF)

739

255

993


1,040

293

1,333

OSB - commodity (MMSF)

736

736


897

897

We measure OEE of each of our mills to track improvements in the utilization and productivity of our manufacturing assets. OEE is a composite metric that considers asset uptime (adjusted for capital project downtime and similar events), production rates, and finished product quality. It should be noted that other companies may present OEE differently and, therefore, as presented by us, OEE may not be comparable to similarly-titled measures reported by other companies. We believe that when used in conjunction with other metrics, OEE can be a useful measure for evaluating our ability to generate profits, and that providing this measure should allow interested persons to more readily monitor operational improvements.

OEE for the three and six months ended June 30, 2023 and 2022 for each of our segments is listed below:


Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


2023


2022

Siding

78 %


76 %


77 %


75 %

OSB

75 %


71 %


75 %


73 %

South America

74 %


75 %


75 %


75 %

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

SELECTED SEGMENT INFORMATION

(DOLLAR AMOUNTS IN MILLIONS)



Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


2023


2022

Net sales








Siding

$                        320


$                        358


$                        651


$                        689

OSB

229


673


418


1,417

South America

53


70


108


137

Other

9


30


17


55

Intersegment sales


(1)



(2)

Total sales

$                        611


$                     1,130


$                     1,195


$                     2,297

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA, NON-GAAP ADJUSTED INCOME, AND NON-GAAP ADJUSTED DILUTED EPS

(DOLLAR AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS)



Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


2023


2022

Net income (loss)

$                     (21)


$                     385


$                         1


$                     868

Add (deduct):








Net loss attributed to non-controlling interest

1




1

Income from discontinued operations, net of income taxes


(37)



(99)

Income (loss) attributed to LP from continuing operations

(20)


348


1


770

Provision for income taxes

21


116


22


240

Depreciation and amortization

29


32


57


64

Stock-based compensation expense

3


6


7


13

Other operating credits and charges, net

17


(11)


22


(10)

Business exit charges

34



34


Interest expense

3


3


6


6

Investment income

(2)


(2)


(7)


(3)

Other non-operating items

8


(2)


11


8

Pension settlement charges



6


Adjusted EBITDA

$                       93


$                     491


$                     159


$                  1,089









Siding

$                       59


$                       78


$                     126


$                     160

OSB

37


403


42


908

South America

13


26


24


51

Other

(6)


(7)


(14)


(13)

Corporate

(9)


(9)


(19)


(17)

Adjusted EBITDA

$                       93


$                     491


$                     159


$                  1,089



Three Months Ended June 30,


Six Months Ended June 30,


2023


2022


2023


2022

Net income (loss) attributed to LP from continuing operations per share - diluted

$                  (0.28)


$                    4.28


$                    0.02


$                    9.19









Net income (loss)

$                     (21)


$                     385


$                         1


$                     868

Add (deduct):








Net loss attributed to non-controlling interest

1




1

Income from discontinued operations, net of income taxes


(37)



(99)

Income (loss) attributed to LP from continuing operations

(20)


348


1


770

Other operating credits and charges, net

17


(11)


22


(10)

Business exit charges

34



34


Pension settlement charges



6


Reported tax provision

21


116


22


240

Adjusted income before tax

53


453


86


1,001

Normalized tax provision at 25%

(13)


(113)


(21)


(250)

Adjusted Income

$                       39


$                     340


$                       64


$                     751

Diluted shares outstanding

72


81


72


84

Adjusted Diluted EPS

$                    0.55


$                    4.19


$                    0.89


$                    8.96

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/lp-building-solutions-reports-second-quarter-2023-results-provides-capital-allocation-update-and-outlook-301891052.html

SOURCE LP Building Solutions

FAQ

What were LP's net sales for Siding Solutions in the second quarter of 2023?

LP's net sales for Siding Solutions decreased by 11% to $318 million.

What was LP's adjusted EBITDA for the second quarter of 2023?

LP's adjusted EBITDA was $93 million, a decrease of $398 million compared to the same period in 2022.

What was LP's cash and cash equivalents as of June 30, 2023?

LP had cash and cash equivalents of $71 million as of June 30, 2023.

What was LP's declared quarterly cash dividend per share?

LP declared a quarterly cash dividend of $0.24 per share.

Louisiana-Pacific Corp.

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