Industry News
Louisiana-Pacific Posts $49 Million Net Loss in Fourth Quarter
02/17/2010
NASHVILLE, TN -- Louisiana-Pacific Corporation reported a $49 million loss in the fourth quarter of 2009, on sales of $275 million. A year earlier, the company reported a whopping $341 million loss, mostly due to impairment charges. For the year, the company lost $121 versus a loss of $579 million in 2008.
"While I am glad 2009 is behind us, LP made significant improvements compared to the prior year," said Chief Executive Officer Rick Frost. "All of our operating segments improved in 2009 despite housing starts falling by 39 percent. We achieved almost 60 percent improvement in OSB; 20 percent better results in EWP; and a tenfold increase in operating results in Siding. We also significantly improved our balance sheet with a net cash position of more than $160 million compared to a net debt of almost $35 million at the end of 2008."
ORIENTED STRAND BOARD (OSB) SEGMENT
LP's OSB segment manufactures and distributes OSB structural panel products. During the quarter, LP operated eight facilities in the segment. Just prior to year end, LP made the decision to permanently close the two previously indefinitely curtailed mills in Athens, Ga., and Silsbee, Texas.
The OSB segment reported net sales for the fourth quarter of 2009 of $114 million, up 4 percent compared with $109 million of net sales in the fourth quarter of 2008. For the fourth quarter of 2009, the OSB segment reported an operating loss of $17.0 million an improvement of 45 percent compared with an operating loss of $31 million in the fourth quarter of 2008. For the fourth quarter, LP realized an improvement of $14 million in adjusted EBITDA from continuing operations for this segment as compared to the fourth quarter of 2008. For the fourth quarter of 2009 as compared to the fourth quarter of 2008, sales volumes were up 16 percent with sales price decreasing by 5 percent. Decrease in sales price accounted for a decline of $5.3 million in both operating results and adjusted EBITDA from continuing operations.
Operating results reflected the favorable effects of continued actions to reduce manufacturing costs by taking advantage of lower cost petroleum-based raw materials, more efficient operating schedules and selective curtailments.
SIDING SEGMENT
LP's Siding segment consists of SmartSide(R) siding as well as LP's prefinished Canexel(R) siding line. These products are used in new construction as well as in repair and remodeling markets. The Siding segment reported net sales of $86 million in the fourth quarter of 2009, up 13 percent from $76 million in the year-ago fourth quarter. For the fourth quarter of 2009, the Siding segment reported an operating income of $5 million compared to loss of $11 million in the year-ago quarter. For the fourth quarter, LP reported $9 million in adjusted EBITDA from continuing operations in this segment, an improvement of $16 million as compared to the fourth quarter of 2008.
In the fourth quarter of 2009, while sales were off across many regions, the Siding segment increased market penetration and experienced continued strength in repair and remodel markets. Like OSB, the segment continued to realize reductions in the cost of petroleum-based raw materials used in production as well as efficiencies in other manufacturing costs.
ENGINEERED WOOD PRODUCTS SEGMENT (EWP)
The EWP segment is comprised of I-Joist (IJ), Laminated Veneer Lumber and Laminated Strand Lumber (LVL and LSL). EWP segment sales in the fourth quarter of 2009 totaled $44 million, down 2 percent from $45 million in the year-ago quarter. Operating losses decreased 24 percent to $9 million for the fourth quarter of 2009 from $12 million for the fourth quarter of 2008. For the fourth quarter, LP reported a loss of $6 million in adjusted EBITDA from continuing operations in this segment, an improvement of $2 million as compared to the fourth quarter of 2008. The margin improvement was due to reduced manufacturing and support costs associated with the mill that produces LSL.
COMPANY OUTLOOK
Frost concluded, "The consensus view is that the housing market in 2010 will be better than last year although there is much debate about the pace and magnitude of the recovery. With current stimulus programs scheduled to end and new programs being considered to improve the job situation and access to funds, the economy is likely to remain volatile. From LP's perspective, we have demonstrated the flexibility to improve results in a declining market. I believe that our people will continue to respond successfully to whatever market situation arises this year."