Louisiana-Pacific Corporation (LPX)
Q1 2010 Earnings Call Transcript
May 10, 2010 11:00 am ET
Curtis Stevens – EVP, Administration and CFO
Richard Frost – CEO
Gail Glazerman – UBS
Mark Weintraub – Buckingham Research
Peter Ruschmeier – Barclays Capital
Paul Quinn – RBC Capital Markets
Chip Dillon – Credit Suisse
Previous Statements by LPX
» Louisiana-Pacific Corporation Q4 2009 Earnings Call Transcript
» Louisiana-Pacific Q3 2009 Earnings Call Transcript
» Louisiana-Pacific Corporation Q2 2009 Earnings Call Transcript
Good day ladies and gentlemen, and welcome to the Louisiana-Pacific Corporation first quarter 2010 earnings conference call. My name is have [ph], and I will be your operator for today. (Operator instructions)
At this time, I would now like to turn the call over to Mr. Curt Stevens, Executive Vice President of Administration and Chief Financial Officer. Please proceed.
Thank you very much, and thanks all of you for joining us on this conference call to discuss our results for the first quarter of 2010. As the operator said, I am Curt Stevens, the Chief Financial Officer, and with me today are Rick Frost, LP’s CEO; as well as Mike Kenny and Becky Barkley, our primary investor relations contacts.
I will begin the discussion with a review of the financial results for the first quarter of 2010, and I will follow this with comments on some of our individual segments, and selected balance sheet items. Rick will then take over give you the weather report for Nashville and then discuss the general market environment in which LP has been operating, his perspective on our most recent operating results and his thoughts on the outlook for the remainder of 2010.
As we have done in the past, we have opened up this call to the public and are doing a web cast. This can be accessed at our website www.lpcorp.com. Additionally, to help with the discussion we have provided a presentation with supplemental information that should be reviewed in conjunction with the earnings release. I will be referencing these slides in my comments. We did file an 8-K this morning with some supplemental information, and we just filed our Form 10-Q for the quarter.
First thing on these slides, I like to remind all participants about the forward-looking statement comment that is included on slide 2 of the presentation. Please also be aware of the discussion of our use of non-GAAP financial information included on Slide 3 of the presentation. The Appendix attached has some of the necessary reconciliations and those have been supplemented by the Form 8-K we filed this morning. I am not going to reread these statements, but I am going to incorporate it with these references.
Slide 4 of the presentation is a discussion of our Q1 2010 results compared to the same quarter of last year and the prior quarter. We are reporting today a net loss for the fourth quarter of $23 million or $0.18 per diluted share. Our net sales from continuing operations were $300 million for the quarter. For the same period last year we reported a net loss of $30 million or $0.29 per diluted share, and sales from continuing operations of $206 million.
Adjusted EBITDA from continuing operations was a positive $3 million in the quarter compared to a loss of $25 million in the first quarter of 2009. There was some movement in the tax rate on continuing operations between the quarters. The effective tax benefit rate in Q1 was 31%. This is primarily the result of the blended rate between jurisdictions with profits in foreign subsidiaries, tax at lower rates and losses in North America in operations.
Q1 of 2009, the tax benefit rate was 39%, basically it is the statutory rate. Had the tax benefit rate in Q1 been the same as last year, net earnings per share would have been improved by about $0.03 a share.
Now let me discuss performance of each of our segments. Slide five of the presentation is a summary of OSB. OSB had an operating loss of $5 million in the quarter compared to $24 million operating loss in Q1 2009. For the quarter, we had a 34% increase in volume, and an average sales price that was 26% higher than the same quarter last year. This resulted in a $24 million improvement in earnings and adjusted EBITDA.
The strengthening of the Canadian dollar, which increases our costs more than revenue due to sales being in the US, hurt our earnings in this segment by about $5 million compared to Q1 of last year. Adjusted EBITDA from continuing operations in the OSB segment for the quarter was a positive $4 million compared to a loss of $17 million in Q1 of last year. Compared to Q4 of 2009, volumes were lower by 14%, while pricing increased by 22%. Volumes in Q1 were constrained by the availability of logs in the US South due to extremely wet weather conditions that occurred during the quarter.
Slide 6 of the presentation is our siding segment, which includes our SmartSide and Canexel siding products and commodity OSB produced in our Hayward mill. For the first quarter siding had operating income of $9 million, significantly better than the $2 million reported in the same quarter last year. Adjusted EBITDA from continuing operations in the siding segment was $14 million compared to $7 million in Q1 of 2009. For the quarter sales were up 20% and unit volumes were better by 29% in SmartSide and down by about 15% in Canexel compared to the same quarter last year.