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| LP Reports Second Quarter 2008 Results |
NASHVILLE, Tenn.--(BUSINESS WIRE)--July 29, 2008--Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported today a second quarter net loss of $81 million, or $0.79 per diluted share, on sales from continuing operations of $387 million. In the second quarter of 2007, LP's net loss was $23 million, or $0.22 per diluted share, on sales from continuing operations of $461 million. For the first six months of 2008, LP reported a net loss of $127 million, or $1.24 per diluted share, on sales from continuing operations of $736 million compared to net loss of $61 million, or $0.58 per diluted share, on sales from continuing operations of $856 million for the first six months of 2007. For the second quarter of 2008, loss from continuing operations was $79 million, or $0.77 per diluted share. In the second quarter of 2007, LP's loss from continuing operations was $16 million, or $0.15 per diluted share. For the first six months of 2008, loss from continuing operations was $125 million, or $1.22 per diluted share. For the first six months of 2007, income from continuing operations was $52 million, or $0.50 per diluted share. Results for the first six months of 2008 included other net operating charges totaling $66.1 million ($40.5 million after tax, or $0.39 per diluted share) and other than temporary impairment on investments of $2.5 million ($1.5 million after tax, or $0.01 per diluted share). Results for the first six months of 2007 include other net operating credits totaling $19.2 million ($11.8 million after tax, or $0.11 per diluted share) and loss on impairment of long-lived assets of $5.2 million ($3.2 million after tax, or $0.03 per diluted share). "Ongoing turmoil in the market pushed demand for most of our products significantly lower than the same quarter last year, with new housing starts declining more than 30 percent," said Chief Executive Officer Rick Frost. "In response, LP took significant curtailments in the quarter to match supply with orders. These shutdowns, coupled with significantly higher raw materials costs, put downward pressure on our margins. We did see improved operating results compared to the first quarter due to seasonal activity but these were more than offset by several non-operating charges, the largest of which was the settlements reached in the OSB antitrust case," Frost concluded. At 11:00 a.m. ET (8:00 a.m. PT) today, LP will host a webcast on its second quarter 2008 financial results. To access the live webcast and accompanying presentation, visit www.lpcorp.com and go to the "Investor Relations" section from the main menu. 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. 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 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 Six Months Ended
June 30, June 30,
------------------- -------------------
2008 2007 2008 2007
--------- -------- --------- --------
Net sales $ 387.0 $ 461.2 $ 736.4 $ 855.8
Income (loss) before
income taxes and equity
in earnings of
unconsolidated affiliates $ (133.0) $ (21.6) $ (208.5) $ (85.6)
Income (loss) from
continuing operations
excluding (gain) loss on
sale or impairment of
long-lived assets and
other operating credits
and charges, net $ (35.3) $ (27.6) $ (83.4) $ (60.2)
Income (loss) from
continuing operations $ (79.4) $ (15.6) $ (125.3) $ (51.6)
Net income (loss) $ (80.8) $ (23.3) $ (127.2) $ (60.6)
Net income (loss) per
share - basic and diluted $ (0.79) $ (0.22) $ (1.24) $ (0.58)
Average shares outstanding
(in millions)
Basic and diluted 102.9 104.2 102.9 104.1
Calculation of income (loss) from continuing operations
excluding (gain) loss on sale or impairment of long-lived
assets and other operating credits and charges, net:
Income (loss) from continuing
operations $(79.4) $(15.6) $(125.3) $(51.6)
Other than temporary investment
impairment 1.7 - 2.5 -
(Gain) loss on sale or
impairment of long-lived
assets 0.1 (0.3) (0.3) 5.2
Other operating credits and
charges, net 70.1 (19.2) 66.1 (19.2)
------- ------- -------- -------
71.9 (19.5) 68.3 (14.0)
Provision (benefit) for income
taxes on above items (27.8) 7.5 (26.4) 5.4
------- ------- -------- -------
44.1 (12.0) 41.9 (8.6)
$(35.3) $(27.6) $ (83.4) $(60.2)
======= ======= ======== =======
Per share - basic $(0.34) $(0.26) $ (0.81) $(0.58)
Per share - diluted $(0.34) $(0.26) $ (0.81) $(0.58)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions, except per share amounts) (Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2008 2007 2008 2007
--------- -------- --------- --------
Net sales $ 387.0 $ 461.2 $ 736.4 $ 855.8
--------- -------- --------- --------
Operating costs and
expenses:
Cost of sales 375.0 437.6 747.8 829.3
Depreciation,
amortization and cost
of timber harvested 26.8 27.4 53.4 55.9
Selling and
administrative 39.1 38.3 79.2 78.5
(Gain) loss on sale or
impairment of long-
lived assets 0.1 (0.3) (0.3) 5.2
Other operating credits
and charges, net 70.1 (19.2) 66.1 (19.2)
--------- -------- --------- --------
Total operating
costs and expenses 511.1 483.8 946.2 949.7
--------- -------- --------- --------
Income (loss) from
operations (124.1) (22.6) (209.8) (93.9)
--------- -------- --------- --------
Non-operating income
(expense):
Foreign currency
exchange gain (loss) (5.1) (12.7) 4.3 (15.5)
Other than temporary
investment impairment (1.7) - (2.5) -
Interest expense, net
of capitalized
interest (12.7) (9.7) (23.9) (20.0)
Investment income 10.6 23.4 23.4 43.8
--------- -------- --------- --------
Total non-operating
income (expense) (8.9) 1.0 1.3 8.3
--------- -------- --------- --------
Income (loss) before taxes
and equity in earnings of
unconsolidated affiliates (133.0) (21.6) (208.5) (85.6)
Provision (benefit) for
income taxes (56.8) (10.9) (92.7) (42.2)
Equity in loss (earnings)
of unconsolidated
affiliates 3.2 4.9 9.5 8.2
--------- -------- --------- --------
Income (loss) from
continuing operations (79.4) (15.6) (125.3) (51.6)
--------- -------- --------- --------
Discontinued operations:
Loss from discontinued
operations before income
taxes (2.3) (12.6) (3.1) (14.8)
Income tax benefit (0.9) (4.9) (1.2) (5.8)
--------- -------- --------- --------
Loss from discontinued
operations (1.4) (7.7) (1.9) (9.0)
--------- -------- --------- --------
Net income (loss) $ (80.8) $ (23.3) $ (127.2) $ (60.6)
========= ======== ========= ========
Net income (loss) per
share of common stock
(basic):
Income (loss) from
continuing operations $ (0.77) $ (0.15) $ (1.22) $ (0.50)
Loss from discontinued
operations (0.02) (0.07) (0.02) (0.08)
--------- -------- --------- --------
Net income (loss) per
share - basic $ (0.79) $ (0.22) $ (1.24) $ (0.58)
========= ======== ========= ========
Net income (loss) per
share of common stock
(diluted):
Income (loss) from
continuing operations $ (0.77) $ (0.15) $ (1.22) $ (0.50)
Loss from discontinued
operations (0.02) (0.07) (0.02) (0.08)
--------- -------- --------- --------
Net income (loss) per
share - diluted $ (0.79) $ (0.22) $ (1.24) $ (0.58)
========= ======== ========= ========
Average shares of stock
outstanding - basic 102.9 104.2 102.9 104.1
========= ======== ========= ========
Average shares of stock
outstanding - diluted 102.9 104.2 102.9 104.1
========= ======== ========= ========
CONDENSED CONSOLIDATED BALANCE SHEETS
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions) (Unaudited)
June 30, December 31,
2008 2007
----------- ------------
ASSETS
Cash and cash equivalents $ 169.4 $ 352.1
Short-term investments 163.4 180.1
Receivables, net 264.2 243.1
Inventories 206.8 212.1
Prepaid expenses and other current assets 9.6 7.6
Deferred income taxes 17.8 0.5
Current portion of notes receivable from
asset sales 20.0 74.4
Current assets of discontinued operations 3.5 6.0
----------- ------------
Total current assets 854.7 1,075.9
Timber and timberlands 59.2 64.1
Property, plant and equipment 2,368.3 2,257.7
Accumulated depreciation (1,228.0) (1,180.9)
----------- ------------
Net property, plant and equipment 1,140.3 1,076.8
Goodwill 277.8 273.5
Notes receivable from asset sales 258.6 258.6
Restricted cash 73.2 61.2
Long-term investments 105.8 152.9
Investments in and advances to affiliates 193.4 198.2
Other assets 58.0 63.1
Long-term assets of discontinued operations 5.0 5.0
----------- ------------
Total assets $ 3,026.0 $ 3,229.3
=========== ============
LIABILITIES AND EQUITY
Current portion of long-term debt $ 123.6 $ 127.6
Short-term notes payable 33.4 45.2
Accounts payable and accrued liabilities 195.8 222.1
Current portion of limited recourse notes
payable 20.0 73.5
Current portion of deferred tax liabilities 4.4 4.4
Current portion of contingency reserves 67.8 15.8
----------- ------------
Total current liabilities 445.0 488.6
Long-term debt, excluding current portion:
Limited recourse notes payable 253.3 253.3
Other long-term debt 244.5 232.5
----------- ------------
Total long-term debt, excluding
current portion 497.8 485.8
Deferred income taxes 308.2 340.0
Other long-term liabilities 84.2 79.6
Minority interest 18.6 -
Contingency reserves, excluding current
portion 21.9 15.8
Commitments and contingencies
Stockholders' equity:
Common stock 116.9 116.9
Additional paid-in capital 438.1 439.0
Retained earnings 1,471.9 1,630.1
Treasury stock (297.3) (302.0)
Accumulated comprehensive loss (79.3) (64.5)
----------- ------------
Total stockholders' equity 1,650.3 1,819.5
----------- ------------
Total liabilities and equity $ 3,026.0 $ 3,229.3
=========== ============
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions) (Unaudited)
Six Months Ended
June 30,
----------------------
2008 2007
--------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (127.2) $ (60.6)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation, amortization and cost of
timber harvested 53.4 57.7
(Earnings) losses of unconsolidated
affiliates 9.5 8.2
(Gain) loss on sale or impairment of long-
lived assets (0.3) 14.2
Stock based compensation expense related to
stock plans 4.9 3.3
Other operating charges and credits, net 72.2 -
Exchange (gain) loss on remeasurement (9.1) 19.1
Cash settlement of contingencies (9.6) (6.9)
Pension (payments) expense, net 6.2 (2.1)
Other adjustments 4.1 (6.1)
Increase in receivables (23.5) (20.2)
(Increase) decrease in inventories 11.0 (0.7)
Increase in prepaid expenses (1.6) (1.9)
Decrease in accounts payable and accrued
liabilities (6.7) (14.4)
Increase (decrease) in deferred income
taxes (38.4) 0.5
--------- -----------
Net cash used in operating activities (55.1) (9.9)
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant, and equipment additions (75.9) (132.3)
Purchase of a business (44.6) -
Investments in and advances to joint
ventures (4.2) (4.9)
Receipt of proceeds from notes receivable 54.4 -
Cash paid for purchase of investments (172.9) (1,538.1)
Proceeds from sales of investments 209.3 1,669.4
(Increase) decrease in restricted cash
under letter of credit requirements (12.0) (10.8)
Other investing activities, net 1.1 2.0
--------- -----------
Net cash used in investing activities (44.8) (14.7)
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt 12.0 13.0
Repayment of debt (53.6) (0.2)
Net borrowings (payments) under revolving
credit agreements (11.8) 29.6
Sale of common stock under equity plans - 2.7
Payment of cash dividends (31.0) (31.4)
--------- -----------
Net cash provided by (used in) financing
activities (84.4) 13.7
--------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 1.6 0.9
--------- -----------
Net decrease in cash and cash equivalents (182.7) (10.0)
Cash and cash equivalents at beginning of
period 352.1 265.7
--------- -----------
Cash and cash equivalents at end of period $ 169.4 $ 255.7
========= ===========
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(Dollar amounts in millions) (Unaudited)
Dollar amounts in Quarter Ended Six Months Ended
millions June 30, June 30,
------------------- --------------------
2008 2007 2008 2007
--------- -------- --------- ---------
Net sales:
OSB $ 163.5 $ 223.3 $ 318.4 $ 412.2
Siding 123.6 131.0 230.7 235.1
Engineered Wood
Products 65.3 85.7 125.8 165.9
Other 36.0 23.9 64.7 47.6
Less: Intersegment
sales (1.4) (2.7) (3.2) (5.0)
--------- -------- --------- ---------
$ 387.0 $ 461.2 $ 736.4 $ 855.8
========= ======== ========= =========
Operating profit (loss):
OSB $ (34.5) $ (44.6) $ (96.6) $ (109.1)
Siding 8.9 17.2 9.2 26.6
Engineered Wood
Products (9.2) 3.9 (17.3) 10.3
Other (0.2) (2.7) (2.6) (0.6)
Other operating credits
and charges, net (70.1) 19.2 (66.1) 19.2
Gain (loss) on sales of
and impairment of long-
lived assets (0.1) 0.3 0.3 (5.2)
General corporate and
other expenses, net (22.1) (20.8) (46.2) (43.3)
Foreign currency gain
(losses) (5.1) (12.7) 4.3 (15.5)
Other than temporary
investment impairment (1.7) - (2.5) -
Investment income 10.6 23.4 23.4 43.8
Interest expense, net of
capitalized interest (12.7) (9.7) (23.9) (20.0)
--------- -------- --------- ---------
Income from operations
before taxes (136.2) (26.5) (218.0) (93.8)
Provision (benefit) for
income taxes (56.8) (10.9) (92.7) (42.2)
--------- -------- --------- ---------
Income (loss) from
continuing operations $ (79.4) $ (15.6) $ (125.3) $ (51.6)
========= ======== ========= =========
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL DATA
(Dollar amounts in millions, except per share amounts) (Unaudited)
1. Results of operations for interim periods are not necessarily
indicative of results to be expected for an entire year.
2. The major components of "Other operating credits and charges, net"
and "(Gain) loss on sale or impairment of long lived assets" in
the Consolidated Statements Of Income for the quarter and six
month period ended June 30 are described below:
In the first quarter of 2007, LP recorded a charge of $5.0 million
to reduce the carrying value of a sawmill mill located in Quebec
to the estimated sales price less selling costs.
In the second quarter of 2007, LP recorded a gain of $17.7 million
associated with proceeds received associated with a favorable
verdict on a legal suit associated with our insurance on hardboard
siding and a gain of $1.5 million associated with a settlement
with the Canadian government on the reduction of certain of LP's
timber licenses in British Columbia.
In the first quarter of 2008, LP recorded a net gain of $4.0
associated with product related warranty reserves and insurance
settlements associated with LP hardboard class action suit and
other associated hardboard siding liabilities.
In the second quarter of 2008, LP recorded a loss of $15.6 million
associated with product related warranty reserves in connection
with LP's hardboard class action suit; a loss of $48 million
associated with LP's settlement of a product related anti-trust
litigation matter; a loss of $5.3 million associated with a
facility explosion and a loss of $1.2 million associated with a
contractor default on a construction project.
3. During the second quarter of 2008, LP recorded other comprehensive
losses of $12.8 million ($7.8 million after-tax) as a reduction to
shareholders' equity associated with LP's auction rate security
holdings due to further temporary declines in the estimated fair
value. For the six month period ended June 30, 2008, LP recorded
other comprehensive losses of $25.5 million ($15.6 million after-
tax) as a reduction to shareholders' equity associated with LP's
auction rate security holdings due to further temporary declines
in the estimated fair value.
4. Income Taxes
Quarter Ended Six Months Ended
June 30, June 30,
------------------- --------------------
2008 2007 2008 2007
--------- -------- --------- ---------
Pre-tax income (loss)
from continuing
operations $ (136.2) $ (26.5) $ (218.0) $ (93.8)
Pre-tax loss from
discontinued
operations (2.3) (12.6) (3.1) (14.8)
--------- -------- --------- ---------
(138.5) (39.1) (221.1) (108.6)
Total tax (provision)
benefit 57.7 15.8 93.9 48.0
--------- -------- --------- ---------
Net income (loss) $ (80.8) $ (23.3) $ (127.2) $ (60.6)
========= ======== ========= =========
Accounting standards require that income tax expense for interim
periods be determined by applying the estimated annual effective
income tax rate, by income component, to year-to-date income or
loss at the end of each quarter, then adding or subtracting the
impact of any changes in reserve requirements or statutory tax
rate changes, if any. Each quarter the income tax accrual is
adjusted to the latest estimate and the difference from the
previously accrued year-to-date balance is adjusted to the current
quarter.
For the six months ended June 30, 2008, the primary differences
between the U.S. statutory rate of 35% and the effective rate on
continuing operations relates to the company's foreign debt
structure and state income taxes. For the six months ended June
30, 2007, the primary differences between the U.S. statutory rate
of 35% and the effective rate on continuing operations relates to
the company's foreign debt structure, state income taxes and the
favorable resolution of an outstanding state tax contingency.
The components and associated effective income tax rates applied to
each period are as follows:
Quarter Ended June 30,
----------------------------------------------
2008 2007
--------------------- ---------------------
Tax Benefit Tax Rate Tax Benefit Tax Rate
----------- -------- ----------- --------
Continuing
operations $ (56.8) 42% $ (10.9) 41%
Discontinued
operations (0.9) 39% (4.9) 39%
----------- -----------
$ (57.7) 42% $ (15.8) 40%
=========== ===========
Six Months Ended June 30,
----------------------------------------------
2008 2007
--------------------- ---------------------
Tax Benefit Tax Rate Tax Benefit Tax Rate
----------- -------- ----------- --------
Continuing
operations $ (92.7) 43% $ (42.2) 45%
Discontinued
operations (1.2) 39% (5.8) 39%
----------- -----------
$ (93.9) 42% $ (48.0) 44%
=========== ===========
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
SUMMARY OF PRODUCTION VOLUMES
Quarter Ended Six Months Ended
June 30 June 30
-------------- ----------------
2008 2007 2008 2007
------ ------ ------- -------
Oriented strand board, million
square feet 3/8" basis (1) 1,029 1,458 2,096 2,808
Oriented strand board, million
square feet 3/8" basis 54 72 167 114
(produced by wood-based siding
mills)
Wood-based siding, million square
feet 3/8" basis 223 247 435 489
Engineered I-Joist, million lineal
feet (1) 22 36 41 71
Laminated veneer lumber (LVL),
thousand cubic feet 1,628 2,165 3,144 4,331
(1) Includes volumes produced by joint venture operations or under
exclusive sales arrangements and sold to LP.
CONTACT: Louisiana-Pacific Corporation Media Relations Mary Cohn, 615-986-5886 or Investor Relations Becky Barckley or Mike Kinney, 615-986-5600 SOURCE: Louisiana-Pacific Corporation (LP) |
