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LP Reports Second Quarter 2012 Results

Stocks in this article: LPX

LP is a premier supplier of building materials, delivering innovative, high-quality commodity and specialty products to its retail, wholesale, homebuilding and industrial customers. Visit LP's web site at www.lpcorp.com for additional information on the company as well as reconciliation of non-GAAP results.

FORWARD LOOKING STATEMENTS

This news release contains statements concerning 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 matters addressed in these statements are 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 availability, cost and other terms of capital; the efficiency and consequences of operations improvement initiatives and cash conservation measures; 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 those contemplated by such forward-looking statements are discussed in greater detail in the company's Securities and Exchange Commission filings.

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

FINANCIAL AND QUARTERLY DATA

(Dollar amounts in millions, except per share amounts) (Unaudited)

             
 
 
 
 
 
Quarter Ended June 30, Six Months Ended June 30,
2012     2011 2012     2011
Net sales $ 427.8 $ 362.4 $ 789.3 $ 694.1
 
Income (loss) from operations $ 19.0 $ (23.6 ) $ 16.9 $ (41.8 )
 
Loss from continuing operations before taxes and equity in losses of unconsolidated affiliates $ (45.5 ) $ (33.9 ) $ (56.1 ) $ (60.3 )
 
Non-GAAP Adjusted income (loss) from continuing operations $ 2.8 $ (25.6 ) $ (6.0 ) $ (41.9 )
 
Loss from continuing operations $ (37.2 ) $ (32.9 ) $ (48.4 ) $ (55.8 )
 
Net loss attributed to LP $ (37.3 ) $ (35.5 ) $ (48.6 ) $ (58.5 )
 
Net loss per share - basic and fully diluted $ (0.27 ) $ (0.27 ) $ (0.35 ) $ (0.45 )
 
Average shares of stock outstanding - basic and fully diluted 137.0 131.4 136.8 131.3
 
             

CONSOLIDATED STATEMENTS OF INCOME

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions, except per share amounts) (Unaudited)

 
 
 
 
 
Quarter Ended June 30, Six Months Ended June 30,
2012     2011 2012     2011
Net sales $ 427.8 $ 362.4 $ 789.3 $ 694.1
Operating costs and expenses:
Cost of sales 359.9 336.3 673.2 631.3
Depreciation and amortization 17.9 20.2 37.0 41.6
Selling and administrative 30.7 27.6 62.0 56.4
Loss on sale or impairment of long-lived assets, net 0.1 2.5 0.2 8.0
Other operating credits and charges, net 0.2   (0.6 )  

(1.4

)

Total operating costs and expenses 408.8   386.0   772.4   735.9  
Income (loss) from operations 19.0   (23.6 ) 16.9   (41.8 )
 
Non-operating income (expense):
Interest expense, net of capitalized interest (13.1 ) (14.4 ) (25.7 ) (28.4 )
Investment income 3.4 3.5 7.6 7.5
Early debt extinguishment (52.2 )

 

(52.2 )
Other non-operating items (2.6 ) 0.6   (2.7 ) 2.4  
Total non-operating expense (64.5 ) (10.3 ) (73.0 ) (18.5 )
 
Loss from continuing operations before taxes and equity in losses of unconsolidated affiliates (45.5 ) (33.9 ) (56.1 ) (60.3 )
Benefit for income taxes (11.1 ) (8.4 ) (12.3 ) (15.2 )
Equity in loss of unconsolidated affiliates 2.8   7.4   4.6   10.7  
Loss from continuing operations (37.2 ) (32.9 ) (48.4 ) (55.8 )
 
Loss from discontinued operations before taxes (0.1 ) (4.1 ) (0.3 ) (4.1 )
Benefit for income taxes   (1.6 ) (0.1 ) (1.6 )
Loss from discontinued operations (0.1 ) (2.5 ) (0.2 ) (2.5 )
 
Net loss (37.3 ) (35.4 ) (48.6 ) (58.3 )
Less: Net income attributed to non-controlling interest   0.1     0.2  
Loss attributed to Louisiana-Pacific Corporation $ (37.3 ) $ (35.5 ) $ (48.6 ) $ (58.5 )
 
Loss per share of common stock (basic):
Loss from continuing operations $ (0.27 ) $ (0.25 ) $ (0.35 ) $ (0.43 )
Loss from discontinued operations   (0.02 )   (0.02 )
Net loss per share $ (0.27 ) $ (0.27 ) $ (0.35 ) $ (0.45 )
 
Net loss per share of common stock (diluted):
Loss from continuing operations $ (0.27 ) $ (0.25 ) $ (0.35 ) $ (0.43 )
Loss from discontinued operations   (0.02 )   (0.02 )
Net loss per share $ (0.27 ) $ (0.27 ) $ (0.35 ) $ (0.45 )
 
Average shares of stock outstanding - basic 137.0 131.4 136.8 131.3
Average shares of stock outstanding - diluted 137.0 131.4 136.8 131.3
 
Amounts attributed to LP Corporation common shareholders
Loss from continuing operations, net of tax $ (37.2 ) $ (33.0 ) $ (48.4 ) $ (56.0 )
Loss from discontinued operations, net of tax (0.1 ) (2.5 ) (0.2 ) (2.5 )
$ (37.3 ) $ (35.5 ) $ (48.6 ) $ (58.5 )
 
           

CONDENSED CONSOLIDATED BALANCE SHEETS

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions) (Unaudited)

 
 
 
 
June 30, 2012 December 31, 2011
ASSETS
Cash and cash equivalents $ 427.1 $ 340.0
Receivables 99.6 65.1
Income tax receivable 3.0 3.5
Inventories 203.5 163.6
Prepaid expenses and other current assets 8.7 5.7
Deferred income taxes 17.0 17.0
Current portion of notes receivable from asset sales 101.4 10.0
Assets held for sale 43.5   51.9  
Total current assets 903.8   656.8  
 
Timber and timberlands 40.8 45.5
 
Property, plant and equipment, at cost 2,027.8 2,028.1
Accumulated depreciation (1,278.8 ) (1,245.9 )
Net property, plant and equipment 749.0   782.2  
 
Notes receivable from asset sales 432.2 523.5
Long-term investments 1.0 0.7
Restricted cash 11.9 12.9
Investments in and advances to affiliates 76.7 79.1
Deferred debt costs 9.8 8.9
Other assets 27.0 26.3
Long-term deferred tax asset 4.0   4.0  
Total assets $ 2,256.2   $ 2,139.9  
 
LIABILITIES AND EQUITY
Current portion of long-term debt $ 6.5 $ 5.3
Current portion of limited recourse notes payable 97.9 7.9
Accounts payable and accrued liabilities 150.6 122.3
Current portion of contingency reserves 4.0   4.0  
Total current liabilities 259.0   139.5  
 
Long-term debt, excluding current portion 784.4 715.9
Contingency reserves, excluding current portion 16.1 17.2
Other long-term liabilities 142.4 160.4
Deferred income taxes 98.3 106.0
 
Stockholders’ equity:
Common stock 149.9 149.8
Additional paid-in capital 539.5 549.9
Retained earnings 633.2 681.8
Treasury stock (261.2 ) (274.4 )
Accumulated comprehensive loss (105.4 ) (106.2 )
Total stockholders’ equity 956.0   1,000.9  
Total liabilities and stockholders’ equity $ 2,256.2   $ 2,139.9  
           

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions) (Unaudited)

 
 
 
 

Quarter Ended June 30,

 

Six Months Ended June 30,

2012     2011 2012     2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (37.3 ) $ (35.4 ) $ (48.6 ) $ (58.3 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 17.9 20.2 37.0 41.6
Loss from unconsolidated affiliates 2.8 7.4 4.6 10.7
Loss on sale or impairment of long-lived assets 0.1 2.5 0.2 8.0
Other operating credits and charges, net 0.2 (1.5 )

(1.5

)
Stock-based compensation related to stock plans 1.6 1.3 4.3 4.8
Exchange loss on remeasurement (1.2 ) 0.2 (0.9 ) 2.7
Early debt extinguishment 52.2 52.2
Cash settlement of contingencies (0.6 ) (0.4 ) (1.2 ) (0.9 )
Cash settlements of warranties, net of accruals (1.5 ) 2.3 (3.9 ) 1.1
Pension expense, net 2.5 0.4 4.1 0.4
Non-cash interest expense, net 0.8 2.3 1.4 3.7
Other adjustments, net 1.2 2.6 1.1 2.8
(Decrease) increase in receivables 5.7 5.8 (34.9 ) (24.7 )
Decrease (increase) in income tax receivable (0.7 ) 13.4 (0.6 ) 4.7
Decrease (increase) in inventories 9.8 29.2 (36.0 ) (20.6 )
Decrease in prepaid expenses (4.9 ) (5.3 ) (3.0 ) (2.9 )
Increase (decrease) in accounts payable and accrued liabilities 9.7 (4.0 ) 19.4 (2.3 )
Decrease in deferred income taxes (11.2 )     (11.6 )       (12.5 )     (8.3 )
Net cash provided by (used in) operating activities 47.1       29.4         (17.3 )     (39.0 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment additions (4.2 ) (5.6 ) (6.8 ) (8.0 )
Investments and advances to joint ventures 1.1 (1.1 ) (1.9 ) (3.1 )
Proceeds from sales of assets 0.2 0.3 9.1 0.3
Decrease in restricted cash under letters of credit/credit facility 0.1   8.1   1.0   16.4  
Net cash provided by (used in) investing activities (2.8 ) 1.7   1.4   5.6  
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt 350.0 350.0
Repayment of long-term debt (242.1 ) (0.1 ) (242.1 ) (0.1 )
Short term borrowings, net of repayments 4.5 4.5
Sale of common stock under equity plans 0.4 0.4
Redemption of non-controlling interest (24.0 ) (24.0 )
Payment of debt issuance fees (6.3 ) (1.0 ) (6.3 ) (1.0 )
Net cash provided by (used in) financing activities 102.0   (20.6 ) 102.0   (20.6 )
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS 0.3   2.3   1.0   (1.3 )
Net increase (decrease) in cash and cash equivalents 146.6 12.8 87.1 (55.3 )
Cash and cash equivalents at beginning of period 280.5   321.2   340.0   389.3  
Cash and cash equivalents at end of period $ 427.1   $ 334.0   $ 427.1   $ 334.0  
 
           

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

SELECTED SEGMENT INFORMATION

(Dollar amounts in millions) (Unaudited)

 
 
 
 
Quarter Ended June 30, Six Months Ended June 30,
Dollar amounts in millions 2012     2011 2012     2011
Net sales:
OSB $ 194.9 $ 140.6 $ 344.4 $ 272.6
Siding 137.0 118.6 250.1 224.7
Engineered Wood Products 51.7 53.6 100.3 101.9
South America 42.7 39.5 85.1 74.9
Other 10.7 10.4 20.8 20.9
Intersegment sales (9.2 ) (0.3 ) (11.4 ) (0.9 )
$ 427.8   $ 362.4   $ 789.3   $ 694.1  
Operating profit (loss):
OSB $ 17.0 $ (22.9 ) $ 16.7 $ (32.0 )
Siding 19.4 11.3 36.1 24.0
Engineered Wood Products (3.4 ) (3.2 ) (6.3 ) (8.7 )
South America 3.6 4.2 6.7 7.9
Other (1.9 ) (2.0 ) (2.5 ) (2.6 )
Other operating credits and charges, net (0.2 ) 0.6 1.4
Loss on sale or impairment of long-lived assets (0.1 ) (2.5 ) (0.2 ) (8.0 )
General corporate and other expenses, net (18.2 ) (16.5 ) (38.2 ) (34.5 )
Foreign currency gains (losses) (2.6 ) 0.6 (2.7 ) 2.4
Early debt extinguishment (52.2 ) (52.2 )
Investment income 3.4 3.5 7.6 7.5
Interest expense, net of capitalized interest (13.1 ) (14.4 ) (25.7 ) (28.4 )
Loss from continuing operations before taxes (48.3 ) (41.3 ) (60.7 ) (71.0 )
Benefit for income taxes (11.1 )     (8.4 )       (12.3 )     (15.2 )
Loss from continuing operations $ (37.2 )     $ (32.9 )       $ (48.4 )     $ (55.8 )
           

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

SUMMARY OF PRODUCTION VOLUMES (1)

The following table sets forth production volumes for the quarter and six months ended June 30, 2012 and 2011.

 
 
Quarter Ended Six Months Ended
June 30, June 30,
2012     2011 2012     2011
Oriented strand board, million square feet 3/8" basis(1) 922 810 1,721 1,578
Oriented strand board, million square feet 3/8" basis (produced by wood-based siding mills) 51 41 96 87
Wood-based siding, million square feet 3/8" basis 236 201 476 422
Engineered I-Joist, million lineal feet(1) 18 16 32 29
Laminated veneer lumber (LVL), thousand cubic feet(1) and laminated strand lumber (LSL), thousand cubic feet 1,723 1,727 3,412 3,356
 

(1) Includes volumes produced by joint venture operations or under sales arrangements and sold to LP.



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