LP Building Solutions Reports Second Quarter of 2022 Results, Provides Capital Allocation Update and Q3 2022 Outlook
On August 9, 2022, Louisiana-Pacific Corporation (LPX) announced its Q2 2022 financial results, reporting a 3% decline in net sales from continuing operations to $1.13 billion. Siding Solutions saw a 24% sales increase to $356 million, while OSB revenue fell 14% to $673 million. Income from continuing operations dropped by 28% to $348 million. The company successfully completed the sale of its Engineered Wood Products segment on August 1, generating gross proceeds of $210 million. Adjusted EBITDA fell to $491 million, a decrease of 26%. Cash provided by operating activities rose by $26 million to $483 million.
- Siding Solutions net sales increased by 24% to $356 million.
- Successful sale of the Engineered Wood Products segment, generating $210 million in gross proceeds.
- Cash provided by operating activities rose by $26 million to $483 million.
- Net sales from continuing operations decreased by 3% to $1.13 billion.
- OSB net sales decreased by 14% to $673 million.
- Income from continuing operations decreased by 28% to $348 million.
NASHVILLE, Tenn., Aug. 9, 2022 /PRNewswire/ -- Louisiana-Pacific Corporation (LP) (NYSE: LPX) today reported its financial results for the three and six months ended June 30, 2022.
Key Highlights for the Second Quarter of 2022, Compared to the Second Quarter of the Prior Year
- Completed the sale of the Engineered Wood Products (EWP) segment on August 1st. Second quarter of 2022 results reflect the EWP segment as discontinued operations
- Net sales from continuing operations decreased by
3% to$1,130 million - Siding Solutions net sales increased by
24% to$356 million - OSB net sales decreased by
14% to$673 million - Income from continuing operations attributed to LP decreased by
$138 million to$348 million ($4.28 per diluted share). Income from discontinued operations increased by$26 million to$37 million ($0.45 per diluted share). - Adjusted EBITDA(1) was
$491 million , a decrease of$174 million ; Adjusted EBITDA including discontinued operations(1) was$535 million , a decrease of$149 million - Adjusted Diluted EPS(1) was
$4.19 per share, a decrease of$0.44 per share; Adjusted Diluted EPS including discontinued operations(1) was$4.57 per share, a decrease of$0.17 per share - Cash provided by operating activities was
$483 million , an increase of$26 million - Received gross proceeds of
$210 million on August 1, 2022 from the sale of the EWP segment, which will result in a pre-tax gain on the sale of between$120 million to$125 million in the third quarter
(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 and "Reconciliation of Income from discontinued operations to Non-GAAP Adjusted EBITDA from discontinued operations. Non-GAAP Adjusted Income from discontinued operations, and Non-GAAP Adjusted Diluted EPS from discontinued operations" below.
Capital Allocation Update
- For the quarter, LP paid
$471 million to repurchase 7.3 million of its common shares, leaving 77.2 million common shares outstanding at June 30, 2022 - Paid
$103 million for capital expenditures during the second quarter - Paid
$18 million in cash dividends during the second quarter - Cash and cash equivalents of
$517 million as of June 30, 2022 - Declared a quarterly cash dividend of
$0.22 per share - After quarter-end and as of August 8, 2022, LP has paid a further
$197 million to repurchase 3.4 million common shares, leaving$329 million remaining under the pre-existing$600 million share repurchase authorization - Common shares outstanding as of August 8, 2022, 73.9 million
"Including the EWP segment, the second quarter of 2022 was another record sales quarter for LP," said LP Chair and Chief Executive Officer Brad Southern. "Despite ongoing raw material inflation and logistics challenges, LP's teams consistently executed our strategy to meet sustained customer demand. The new Siding mill in Houlton, Maine, is ramping up ahead of schedule, and contributed to Siding reaching a quarterly sales record of
Second Quarter 2022 Highlights
Net sales for the second quarter of 2022 decreased year-over-year by
Income from continuing operations attributed to LP for the second quarter of 2022 decreased year-over-year by
Income from discontinued operations for the second quarter of 2022 increased year-over-year by
First Six Months of 2022 Highlights
Net sales for the first six months of 2022 increased year-over-year by
Income from continuing operations attributed to LP for the first six months of 2022 decreased year-over-year by
Income from discontinued operations for the first six months of 2022 increased year-over-year by
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 Solutions® (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, | ||||||||||
2022 | 2021 | Percentage | 2022 | 2021 | Percentage | ||||||
Net sales | $ 358 | $ 291 | 23 % | $ 689 | $ 576 | 20 % | |||||
Adjusted EBITDA | 78 | 77 | — % | 160 | 168 | (5) % | |||||
Three Months Ended June 30, 2022 versus 2021 | Six Months Ended June 30, 2022 versus 2021 | ||||||
Average Net Selling Price | Unit Shipments | Average Net Selling Price | Unit Shipments | ||||
Siding Solutions | 12 % | 10 % | 12 % | 7 % | |||
The combined effects of list price increases and improving mix of innovative products drove year-over-year increases in the average net selling price for the three and six months ended June 30, 2022. Additionally, the production ramp-up of the Houlton facility was ahead of schedule and contributed almost half of the year-over-year sales volume increase during the three months ended June 30, 2022.
Adjusted EBITDA increased for the three months ended June 30, 2022, reflecting price and volume growth largely offset by
Oriented Strand Board (OSB)
The OSB segment manufactures and distributes OSB structural panel products including the value-added OSB portfolio known as LP Structural Solutions (LP® TechShield® Radiant Barrier, LP WeatherLogic® Air & Water Barrier, LP Legacy® Premium Sub-Flooring, and 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, | ||||||||||
2022 | 2021 | Percentage | 2022 | 2021 | Percentage | ||||||
Net sales | $ 673 | $ 778 | (14) % | $ 1,417 | $ 1,317 | 8 % | |||||
Adjusted EBITDA | 403 | 565 | (29) % | 908 | 919 | (1) % | |||||
Three Months Ended June 30, 2022 versus 2021 | Six Months Ended June 30, 2022 versus 2021 | ||||||
Average Net Selling Price | Unit Shipments | Average Net Selling Price | Unit Shipments | ||||
OSB - Structural Solutions | (14) % | 28 % | 1 % | 29 % | |||
OSB - Commodity | (30) % | (4) % | (8) % | (4) % | |||
OSB average net selling prices decreased year-over-year by
The decrease in Adjusted EBITDA of
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, and Paraguay.
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, | ||||||||||
2022 | 2021 | Percentage | 2022 | 2021 | Percentage | ||||||
Net sales | $ 70 | $ 74 | (5) % | $ 137 | $ 126 | 8 % | |||||
Adjusted EBITDA | 26 | 34 | (23) % | 51 | 54 | (5) % | |||||
Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | ||||||
Average Net Selling Price | Unit Shipments | Average Net Selling Price | Unit Shipments | ||||
OSB - Structural Solutions | 4 % | (4) % | 15 % | (1) % | |||
Siding | (14) % | (32) % | (3) % | (37) % | |||
Net sales in South America decreased year-over-year by
The year-over-year decrease in Adjusted EBITDA of
Q3 2022 Outlook and 2022 Capital Expenditure Guidance
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 third quarter of 2022 year-over-year revenue growth expected to be approximately
20% - OSB revenue in the third quarter of 2022 expected to be sequentially lower than the second quarter of 2022 by approximately
40% , assuming that OSB prices published by Random Lengths remain unchanged from those published on August 5, 2022. This is an assumption for modeling purposes and not a price forecast - Adjusted EBITDA(2) for the third quarter of 2022 expected to be approximately
$200 million - Siding Solutions full-year 2022 expected year-over-year revenue growth continues to be greater than
20% - Given our current outlook, capital expenditures for 2022 are expected to be in the range of
$400 million to$430 million , including$200 million to$210 million for the mill conversions,$120 million to$130 million for sustaining maintenance, and$80 million to$90 million for other strategic growth projects
(2) This is a non-GAAP financial measure. With respect to Adjusted EBITDA for the third quarter of 2022, certain items that affect net income on a GAAP basis, such as 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.
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 registering here to receive the toll-free number and a personal access pin or over the internet by going to investor.lpcorp.com and clicking "Events and Presentations" 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 Events and Presentations 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 Solutions®), LP Structural Solutions (LP® TechShield® Radiant Barrier, LP WeatherLogic® Air & Water Barrier, LP Legacy® Premium Sub-Flooring, LP® FlameBlock® Fire-Rated Sheathing, LP NovaCore™ Thermal Insulated Sheathing, and more), LP® TopNotch® 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. 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, which may be amplified by the invasion of Ukraine by Russia, the sanctions (including their duration), and other measures being imposed in response to this conflict, as well as any escalation or expansion of economic disruption or the conflict's current scope: impacts from public health issues (including global pandemics, such as the ongoing COVID-19 pandemic) on the economy, demand for our products or our operations, including the actions and recommendations of governmental authorities to contain such public health issues; changes in governmental fiscal and monetary policies, including tariffs and levels of employment; changes in general economic conditions, including impacts from the ongoing COVID-19 pandemic; 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 the 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 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; 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; changes in the funding requirements of our defined benefit pension plans; 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, 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 attributed to LP from continuing operations before interest expense, provision for income taxes, depreciation and amortization, and exclude stock-based compensation expense, loss on impairment attributed to LP, 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 attributed to LP from continuing operations, excluding loss on impairment attributed to LP, 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, 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. We also disclose income from discontinued operations, before interest expense, provision for income taxes, depreciation and amortization, and exclude stock-based compensation expense, other operating credits and charges, net, and other non-operating items attributable to discontinued operations (Adjusted EBITDA from discontinued operations), income from discontinued operations, excluding other operating credits and charges, net and adjusting for a normalized tax rate (Adjusted Income from discontinued operations), and Adjusted Income divided by diluted shares outstanding (Adjusted Diluted EPS from discontinued operations), which are non-GAAP financial measures. We believe that Adjusted EBITDA from discontinued operations, Adjusted Income from discontinued operations, and Adjusted Diluted EPS from discontinued operations are useful measures in this period for evaluating our earnings prior to our entry into an asset purchase agreement to sell the assets of the EWP segment as of June 21, 2022 and that providing these measures should allow interested persons to more readily compare the earnings for past and future periods.
Adjusted EBITDA, Adjusted Income, Adjusted Diluted EPS, Adjusted EBITDA from discontinued operations, Adjusted Income from discontinued operations, and Adjusted Diluted EPS from discontinued operations are not substitutes for the U.S. GAAP measures of net income and net income 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, Adjusted Diluted EPS, Adjusted EBITDA from discontinued operations, Adjusted Income from discontinued operations, and Adjusted Diluted EPS from discontinued operations have material limitations as performance measures because they exclude items that are actually incurred or experienced in connection with the operation of our business.
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, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Net sales | $ 1,130 | $ 1,168 | $ 2,297 | $ 2,062 | |||
Cost of sales | (611) | (483) | (1,158) | (910) | |||
Gross profit | 518 | 684 | 1,139 | 1,152 | |||
Selling, general, and administrative expenses | (67) | (53) | (129) | (97) | |||
Other operating credits and charges, net | 11 | 3 | 10 | 3 | |||
Income from operations | 462 | 634 | 1,019 | 1,058 | |||
Interest expense | (3) | (4) | (6) | (9) | |||
Investment income | 2 | — | 3 | 1 | |||
Other non-operating items | 2 | (3) | (8) | (11) | |||
Income before income taxes | 463 | 629 | 1,007 | 1,040 | |||
Provision for income taxes | (116) | (144) | (240) | (239) | |||
Equity in unconsolidated affiliate | 1 | 1 | 2 | 2 | |||
Income from continuing operations | 348 | 486 | 769 | 802 | |||
Income from discontinued operations | 37 | 11 | 99 | $ 14 | |||
Net income | $ 385 | $ 497 | $ 868 | $ 817 | |||
Net loss attributed to noncontrolling interest | — | — | 1 | 1 | |||
Net income attributed to LP | $ 384 | $ 498 | $ 868 | $ 818 | |||
Net income attributed to LP per share of common stock: | |||||||
Income per share continuing operations - basic | $ 4.30 | $ 4.82 | $ 9.25 | $ 7.76 | |||
Income per share discontinued operations - basic | 0.46 | 0.11 | 1.18 | 0.14 | |||
Net income per share - basic | $ 4.76 | $ 4.93 | $ 10.43 | $ 7.90 | |||
Income per share continuing operations - diluted | $ 4.28 | $ 4.79 | $ 9.19 | $ 7.71 | |||
Income per share discontinued operations - diluted | 0.45 | 0.11 | 1.18 | 0.14 | |||
Net income per share - diluted | $ 4.73 | $ 4.90 | $ 10.36 | $ 7.85 | |||
Average shares of common stock used to compute net income | |||||||
Basic | 81 | 101 | 83 | 103 | |||
Diluted | 81 | 102 | 84 | 104 | |||
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (DOLLAR AMOUNTS IN MILLIONS) | |||
June 30, 2022 | December 31, 2021 | ||
ASSETS | |||
Cash and cash equivalents | $ 503 | $ 358 | |
Receivables | 219 | 169 | |
Inventories | 309 | 278 | |
Prepaid expenses and other current assets | 28 | 17 | |
Current assets held for sale | 148 | 68 | |
Total current assets | 1,208 | 890 | |
Timber and timberlands | 40 | 42 | |
Property, plant, and equipment, net | 1,166 | 1,039 | |
Operating lease assets | 46 | 50 | |
Goodwill and other intangible assets | 37 | 39 | |
Investments in and advances to affiliates | 7 | 7 | |
Restricted cash | 13 | 13 | |
Other assets | 25 | 25 | |
Deferred tax asset | 4 | 2 | |
Long-term assets held for sale | — | 87 | |
Total assets | $ 2,547 | $ 2,194 | |
LIABILITIES AND EQUITY | |||
Accounts payable and accrued liabilities | $ 315 | $ 305 | |
Income tax payable | 80 | 13 | |
Current liabilities held for sale | 69 | 34 | |
Total current liabilities | 464 | 351 | |
Long-term debt | 346 | 346 | |
Deferred income taxes | 114 | 85 | |
Non-current operating lease liabilities | 44 | 44 | |
Other long-term liabilities | 26 | 24 | |
Contingency reserves, excluding current portion | 64 | 63 | |
Long-term liabilities held for sale | — | 43 | |
Total liabilities | 1,059 | 955 | |
Redeemable noncontrolling interest | 3 | 4 | |
Stockholders' equity: | |||
Common stock | 94 | 102 | |
Additional paid-in capital | 457 | 458 | |
Retained earnings | 1,505 | 1,239 | |
Treasury stock | (390) | (390) | |
Accumulated comprehensive loss | (181) | (174) | |
Total stockholders' equity | 1,484 | 1,235 | |
Total liabilities and stockholders' equity | $ 2,547 | $ 2,194 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES (DOLLAR AMOUNTS IN MILLIONS) | |||||||
Three Months Ended | Six Months Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ 385 | $ 497 | $ 868 | $ 817 | |||
Adjustments to net income: | |||||||
Depreciation and amortization | 33 | 29 | 65 | 58 | |||
Gain on sale of joint ventures | — | — | (39) | — | |||
Deferred taxes | 16 | 3 | 27 | 7 | |||
Loss on early debt extinguishment | — | — | — | 11 | |||
Other adjustments, net | 7 | 7 | 12 | 10 | |||
Changes in assets and liabilities (net of acquisitions and divestitures): | |||||||
Receivables | 61 | (50) | (66) | (124) | |||
Prepaid expenses and other current assets | (14) | (9) | (11) | (6) | |||
Inventories | 12 | (3) | (43) | (53) | |||
Accounts payable and accrued liabilities | 34 | 39 | 31 | 37 | |||
Income taxes payable, net of receivables | (51) | (56) | 65 | 16 | |||
Net cash provided by operating activities | 483 | 457 | 908 | 772 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Property, plant, and equipment additions | (103) | (32) | (196) | (65) | |||
Proceeds from business divestiture | — | — | 59 | — | |||
Other investing activities | 1 | 1 | 2 | 3 | |||
Net cash used in investing activities | (102) | (31) | (135) | (63) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowing of long-term debt | — | — | — | 350 | |||
Repayment of long-term debt, including redemption premium | — | — | — | (359) | |||
Payment of cash dividends | (18) | (16) | (37) | (33) | |||
Purchase of stock | (471) | (465) | (575) | (588) | |||
Other financing activities | — | (2) | (15) | (12) | |||
Net cash used in financing activities | (489) | (484) | (626) | (642) | |||
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS, AND | (13) | 2 | (2) | — | |||
Net increase in cash, cash equivalents, and restricted cash | (121) | (55) | 145 | 68 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 637 | 658 | 371 | 535 | |||
Cash, cash equivalents, and restricted cash at end of period | $ 517 | $ 603 | $ 516 | $ 603 | |||
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, 2022 and 2021:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Housing starts1: | |||||||
Single-Family | 299 | 309 | 566 | 565 | |||
Multi-Family | 151 | 126 | 274 | 229 | |||
450 | 436 | 840 | 793 | ||||
1Actual U.S. Housing starts data reported by U.S. Census Bureau as published through July 19, 2022. |
We monitor sales volumes for our products in our Siding, OSB and EWP 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, 2022 and 2021:
Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | ||||||||
Sales Volume | Siding | OSB | South | Total | Siding | OSB | South | Total | |
Siding Solutions (MMSF) | 448 | — | 9 | 457 | 869 | — | 16 | 885 | |
OSB - commodity (MMSF) | — | 460 | — | 460 | — | 897 | — | 897 | |
OSB - Structural Solutions (MMSF) | — | 514 | 149 | 664 | — | 1,040 | 293 | 1,333 | |
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | ||||||||
Sales Volume | Siding | OSB | South | Total | Siding | OSB | South | Total | |
Siding Solutions (MMSF) | 406 | — | 13 | 419 | 810 | — | 26 | 836 | |
OSB - commodity (MMSF) | — | 481 | — | 481 | — | 936 | — | 936 | |
OSB - value added (MMSF) | — | 403 | 147 | 550 | — | 804 | 296 | 1,100 | |
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, 2022 and 2021 for each of our segments is listed below:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Siding | 76 % | 74 % | 75 % | 74 % | |||
OSB | 71 % | 77 % | 73 % | 75 % | |||
South America | 75 % | 78 % | 75 % | 76 % | |||
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES SELECTED SEGMENT INFORMATION (DOLLAR AMOUNTS IN MILLIONS) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Net sales | |||||||
Siding | $ 358 | $ 291 | $ 689 | $ 576 | |||
OSB | 673 | 778 | 1,417 | 1,317 | |||
South America | 70 | 74 | 137 | 126 | |||
Other | 30 | 26 | 55 | 43 | |||
Intersegment sales | (1) | — | (2) | (1) | |||
Total sales | $ 1,130 | $ 1,168 | $ 2,297 | $ 2,062 | |||
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA, NON-GAAP ADJUSTED INCOME, AND (DOLLAR AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Net income | $ 385 | $ 497 | $ 868 | $ 817 | |||
Add (deduct): | |||||||
Net loss attributed to noncontrolling interest | — | — | 1 | 1 | |||
Income from discontinued operations, net of income taxes | (37) | (11) | (99) | (14) | |||
Income attributed to LP from continuing operations | 348 | 486 | 770 | 803 | |||
Provision for income taxes | 116 | 144 | 240 | 239 | |||
Depreciation and amortization | 32 | 29 | 64 | 57 | |||
Stock-based compensation expense | 6 | 3 | 13 | 5 | |||
Other operating credits and charges, net | (11) | (3) | (10) | (3) | |||
Loss on early debt extinguishment | — | — | — | 11 | |||
Interest expense | 3 | 4 | 6 | 9 | |||
Investment income | (2) | — | (3) | (1) | |||
Other non-operating items | (2) | 3 | 8 | — | |||
Adjusted EBITDA | $ 491 | $ 665 | $ 1,089 | $ 1,119 | |||
Siding | $ 78 | $ 77 | $ 160 | $ 168 | |||
OSB | 403 | 565 | 908 | 919 | |||
South America | 26 | 34 | 51 | 54 | |||
Other | (7) | (4) | (13) | (8) | |||
Corporate | (9) | (7) | (17) | (14) | |||
Adjusted EBITDA | $ 491 | $ 665 | $ 1,089 | $ 1,119 | |||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Net income | $ 385 | $ 497 | $ 868 | $ 817 | |||
Add (deduct): | |||||||
Net loss attributed to noncontrolling interest | — | — | 1 | 1 | |||
Loss from discontinued operations | (37) | (11) | (99) | (14) | |||
Income attributed to LP | 348 | 486 | 770 | 803 | |||
Loss on impairment attributed to LP | — | — | 1 | — | |||
Other operating credits and charges, net | (11) | (3) | (10) | (3) | |||
Loss on early debt extinguishment | — | — | — | 11 | |||
Reported tax provision | 116 | 144 | 240 | 239 | |||
Adjusted income before tax | 453 | 627 | 1,001 | 1,050 | |||
Normalized tax provision at | (113) | (157) | (250) | (263) | |||
Adjusted Income | $ 340 | $ 470 | $ 751 | $ 788 | |||
Diluted shares outstanding | 81 | 102 | 84 | 104 | |||
Diluted net income attributed to LP per share | $ 4.73 | $ 4.90 | $ 10.36 | $ 7.85 | |||
Adjusted Diluted EPS | $ 4.19 | $ 4.63 | $ 8.96 | $ 7.56 | |||
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES RECONCILIATION OF INCOME FROM DISCONTINUED OPERATIONS TO NON-GAAP ADJUSTED EBITDA FROM (DOLLAR AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Income from discontinued operations | $ 37 | $ 11 | $ 99 | $ 14 | |||
Provision for income taxes | 5 | 4 | 20 | 5 | |||
Depreciation and amortization | 1 | 1 | 1 | 1 | |||
Stock-based compensation expense | — | — | — | — | |||
Other operating credits and charges, net | — | — | (40) | — | |||
Other non-operating items | — | 3 | — | 5 | |||
Adjusted EBITDA from discontinued operations | $ 43 | $ 18 | $ 81 | $ 26 | |||
Adjusted EBITDA from continuing operations | 491 | 665 | 1,089 | 1,119 | |||
Adjusted EBITDA including discontinued operations | 535 | 684 | 1,170 | 1,145 | |||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Income from discontinued operations | $ 37 | $ 11 | $ 99 | $ 14 | |||
Other operating credits and charges, net | — | — | (40) | — | |||
Reported tax provision | 5 | 4 | 20 | 5 | |||
Adjusted income from discontinued operations before tax | 42 | 15 | 79 | 19 | |||
Normalized tax provision at | (10) | (4) | (20) | (5) | |||
Adjusted Income from discontinued operations | $ 31 | $ 11 | $ 60 | $ 14 | |||
Diluted shares outstanding | 81 | 102 | 84 | 104 | |||
Diluted income per share discontinued operations | $ 0.45 | $ 0.11 | $ 1.18 | $ 0.14 | |||
Adjusted Diluted EPS from discontinued operations | $ 0.39 | $ 0.11 | $ 0.71 | $ 0.14 | |||
Adjusted Diluted EPS from continuing operations | 4.19 | 4.63 | 8.96 | 7.56 | |||
Adjusted Diluted EPS including discontinued operations | $ 4.57 | $ 4.74 | $ 9.67 | $ 7.70 | |||
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SOURCE LP Building Solutions
FAQ
What were Louisiana-Pacific's financial results for Q2 2022?
How did the sale of the Engineered Wood Products segment impact LPX?
What was the income from continuing operations for LPX in Q2 2022?
Did Louisiana-Pacific experience any sales growth in Q2 2022?
What is the adjusted EBITDA for Louisiana-Pacific in Q2 2022?
