NASHVILLE, Tenn.--(BUSINESS WIRE)--July 27,
2005--Louisiana-Pacific Corporation (LP) (NYSE:LPX) reported today
second quarter net income of $100 million, or $0.90 per diluted share,
on sales from continuing operations of $692 million. In the second
quarter of 2004, LP's net income was $192 million, or $1.77 per
diluted share, on sales from continuing operations of $790 million.
For the first six months of 2005, LP reported net income of $202
million, or $1.82 per diluted share, on sales from continuing
operations of $1.4 billion compared to net income of $299 million, or
$2.73 per diluted share, on sales from continuing operations of $1.5
billion for the first six months of 2004.
For the second quarter of 2005, income from continuing operations
was $104 million, or $0.94 per diluted share. In the second quarter of
2004, LP's income from continuing operations was $188 million, or
$1.71 per diluted share. For the first six months 2005, income from
continuing operations was $210 million, or $1.89 per diluted share.
For the first six months of 2004, income from continuing operations
was $298 million, or $2.72 per diluted share. Results for the first
six months of 2004 included charges primarily for the early
extinguishment of debt, impairments of long-lived assets, litigation
and other net operating charges totaling $63 million ($39 million
after tax, or $0.36 per diluted share).
"Though OSB prices continued a downward trend in the quarter, our
other businesses showed improved performance from last quarter, with
the result that LP again earned over $100 million in quarterly net
income," said Rick Frost, CEO. "Compared to the same quarter last
year, when the industry realized record OSB pricing, OSB prices
declined 27%, leading to an almost $150 million year-over-year decline
in both quarterly OSB sales and operating profits. Our non-OSB
businesses grew sales by over $35 million compared to the same quarter
last year. "
Frost continued, "Engineered Wood Products experienced strong
profitability compared to the previous quarter, due to both increased
sales and volumes. Siding rebounded from a slow first quarter, and our
decking business performed strongly. We are making steady progress
toward our goal of growing the sales and profitability of our non-OSB
businesses, while still enjoying a favorable OSB market."
At 11:00 a.m. EST (8:00 a.m. PST) today, LP will host a webcast on
its second quarter 2005 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,
--------------- -------------------
2005 2004 2005 2004
------- ------- --------- ---------
Net sales $ 692.0 $ 790.2 $1,353.4 $1,464.0
Income before taxes and equity
in earnings of unconsolidated
affiliates $ 159.5 $ 292.7 $ 324.5 $ 464.3
Income from continuing operations
excluding (gain) loss on sale or
impairment of long-lived assets,
other operating credits and
charges, net and loss on early
extinguishment of debt $ 104.8 $ 190.4 $ 209.9 $ 336.5
Income from continuing operations $ 104.4 $ 188.1 $ 209.8 $ 297.6
Net income $ 100.3 $ 192.4 $ 202.0 $ 298.9
Net income per share - basic $ 0.90 $ 1.77 $ 1.83 $ 2.77
- diluted $ 0.90 $ 1.75 $ 1.82 $ 2.73
Average shares outstanding
(in millions)
Basic 110.9 109.0 110.5 107.9
Diluted 111.5 110.2 111.3 109.3
Calculation of income from continuing operations excluding (gain) loss
on sale or impairment of long-lived assets, other operating credits
and charges, net and loss on early extinguishment of debt:
Income from continuing operations $ 104.4 $ 188.1 $ 209.8 $ 297.6
(Gain) loss on sale or impairment
of long-lived assets (0.7) 0.2 (0.9) 13.0
Other operating credits and
charges, net 1.4 2.4 1.1 9.1
Loss on early extinguishment of
debt - 1.2 - 41.3
------ ------ -------- --------
0.7 3.8 0.2 63.4
Provision for income taxes 0.3 1.5 0.1 24.5
------ ------ -------- --------
0.4 2.3 0.1 38.9
------ ------ -------- --------
$ 104.8 $ 190.4 $ 209.9 $ 336.5
====== ====== ======== ========
Per share - basic $ 0.95 $ 1.75 $ 1.90 $ 3.12
diluted $ 0.94 $ 1.73 $ 1.89 $ 3.08
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,
--------------- -------------------
2005 2004 2005 2004
------- ------- --------- ---------
Net Sales $ 692.0 $ 790.2 $1,353.4 $1,464.0
------- ------- --------- ---------
OPERATING COSTS AND EXPENSES
Cost of sales 463.5 416.8 889.1 775.3
Depreciation, amortization and
depletion 32.4 31.4 65.3 64.2
Selling and administrative 36.1 40.4 73.7 81.8
(Gain) loss on sale or
impairment of long lived
assets (0.7) 0.2 (0.9) 13.0
Other operating credits and
charges, net 1.4 2.4 1.1 9.1
------- ------- --------- ---------
Total operating costs and
expenses 532.7 491.2 1,028.3 943.4
------- ------- --------- ---------
Income from operations 159.3 299.0 325.1 520.6
------- ------- --------- ---------
NON-OPERATING INCOME (EXPENSE)
Foreign currency exchange
(loss) gain (1.4) 1.3 (2.0) 1.1
Loss on early extinguishment of
debt - (1.2) - (41.3)
Interest expense, net of
capitalized interest (15.3) (15.4) (31.0) (35.4)
Investment income 16.9 9.0 32.4 19.3
------- ------- --------- ---------
Total non-operating income
(expense) 0.2 (6.3) (0.6) (56.3)
------- ------- --------- ---------
Income before taxes and equity
in earnings of unconsolidated
affliates 159.5 292.7 324.5 464.3
Provision for income taxes 55.2 105.4 115.5 168.0
Equity in income of unconsolidated
affliates (0.1) (0.8) (0.8) (1.3)
------- ------- --------- ---------
Income from continuing operations 104.4 188.1 209.8 297.6
------- ------- --------- ---------
DISCONTINUED OPERATIONS
Income (loss) from discontinued
operations (6.6) 7.0 (12.6) 2.1
Income tax provision (benefit) (2.5) 2.7 (4.8) 0.8
------- ------- --------- ---------
Income (loss) from discontinued
operations (4.1) 4.3 (7.8) 1.3
------- ------- --------- ---------
Net income $ 100.3 $ 192.4 $ 202.0 $ 298.9
======= ======= ========= =========
Net income per share of common
stock (basic):
Income from continuing operations $ 0.94 $ 1.73 $ 1.90 $ 2.76
Income (loss) from discontinued
operations (0.04) 0.04 (0.07) 0.01
------- ------- --------- ---------
Net Income - per share basic $ 0.90 $ 1.77 $ 1.83 $ 2.77
======= ======= ========= =========
Net income per share of common
stock (diluted):
Income from continuing operations $ 0.94 $ 1.71 $ 1.89 $ 2.72
Income (loss) from discontinued
operations (0.04) 0.04 (0.07) 0.01
------- ------- --------- ---------
Net Income - per share diluted $ 0.90 $ 1.75 $ 1.82 $ 2.73
======= ======= ========= =========
Average shares of stock
outstanding - basic 110.9 109.0 110.5 107.9
Average shares of stock
outstanding - diluted 111.5 110.2 111.3 109.3
CONDENSED CONSOLIDATED BALANCE SHEETS
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions) (Unaudited)
June 30, 2005 December 31, 2004
--------------- -----------------
ASSETS
Cash and cash equivalents $ 656.5 $ 544.7
Short-term investments 635.4 608.2
Receivables, net 189.3 185.5
Inventories 218.5 203.5
Prepaid expenses and other current
assets 17.3 15.9
Deferred income taxes 1.0 26.7
Current portion of notes receivable
from asset sales 70.8 -
Current assets of discontinued
operations 17.6 19.6
--------------- -----------------
Total current assets 1,806.4 1,604.1
Timber and timberlands 95.6 97.7
Property, plant and equipment 1,762.8 1,758.6
Accumulated depreciation (1,018.7) (1,008.3)
--------------- -----------------
Net property, plant and equipment 744.1 750.3
Goodwill 273.5 273.5
Notes receivable from asset sales 333.1 403.8
Long-term investments 35.3 30.2
Restricted cash 66.4 65.5
Investments in and advances to
affliates 176.8 132.7
Other assets 49.2 37.6
Long-term assets of discontinued
operations 27.1 55.2
--------------- -----------------
Total assets $ 3,607.5 $ 3,450.6
=============== =================
LIABILITIES AND EQUITY
Current portion of long-term debt $ 193.0 $ 178.0
Current portion of limited recourse
notes payable 69.7 -
Accounts payable and accrued
liabilities 218.3 250.0
Current portion of contingency
reserves 12.0 12.0
--------------- -----------------
Total current liabilities 493.0 440.0
Long-term debt, excluding current
portion:
Limited recourse notes
payable 326.8 396.5
Other long-term debt 209.7 226.0
--------------- -----------------
Total long-term
debt, excluding
current portion 536.5 622.5
Contingency reserves, excluding
current portion 37.4 42.1
Other long-term liabilities 54.5 60.7
Deferred income taxes 528.6 517.5
Commitments and contingencies
Stockholders' equity:
Common stock 116.9 116.9
Additional paid-in capital 438.7 440.0
Retained earnings 1,583.3 1,406.2
Treasury stock (113.3) (127.4)
Accumulated comprehensive
loss (68.1) (67.9)
--------------- -----------------
Total stockholders'
equity 1,957.5 1,767.8
--------------- -----------------
Total liabilities
and equity $ 3,607.5 $ 3,450.6
=============== =================
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions) (Unaudited)
Six Months Ended
June 30,
-------------------
2005 2004
---------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 202.0 $ 298.9
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and cost of timber
harvested 66.4 67.0
Loss on sale or impairment of long-lived assets 2.0 20.6
Tax effect of exercise of stock options 3.5 -
Loss on early debt extinguishment - 41.3
Exchange (gain) loss on remeasurement 6.3 (2.4)
Other operating charges and credits, net 0.5 2.7
Cash settlement of contingencies (4.7) (29.4)
Other adjustments, net 7.6 11.3
Pension payments (12.0) (33.0)
(Increase) decrease in receivables 5.6 (27.8)
Increase in inventories (9.6) (1.5)
Increase in prepaid expenses (0.1) (3.7)
Decrease in accounts payable and accrued
liabilities (50.9) (20.7)
Increase in deferred income taxes 34.7 66.3
---------- --------
Net cash provided by operating activities 251.3 389.6
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment additions (67.0) (55.4)
Proceeds from asset sales 30.1 12.1
Investment in joint ventures (52.1) (6.7)
Proceeds of sales of investments 1,680.3 284.8
Cash paid for purchase of investments (1,711.7) (788.6)
Other investing activities, net - (0.5)
---------- --------
Net cash used in investing activities (120.4) (554.3)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt - (246.4)
Sale of common stock under equity plans 8.7 29.6
Payment of cash dividends (24.9) (13.4)
Decrease in restricted cash under LOCs (0.8) 29.3
---------- --------
Net cash used in financing activities (17.0) (200.9)
---------- --------
EFFECT OF EXCHANGE RATE ON CASH AND CASH
EQUIVALENTS: (2.1) -
---------- --------
Net increase (decrease) in cash and cash
equivalents 111.8 (365.6)
Cash and cash equivalents at beginning of period 544.7 925.9
---------- --------
Cash and cash equivalents at end of period $ 656.5 $ 560.3
========== ========
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(Dollar amounts in millions) (Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
-------------- -------------------
2005 2004 2005 2004
------- ------- --------- ---------
Net sales:
OSB $ 403.9 $ 535.9 $ 820.1 $ 992.5
Siding 125.2 113.8 220.6 211.2
Engineered Wood Products 120.5 103.6 229.8 183.0
Other 45.6 37.6 88.4 81.8
Less: Intersegment sales (3.2) (0.7) (5.5) (4.5)
------- ------- --------- ---------
$ 692.0 $ 790.2 $1,353.4 $1,464.0
======= ======= ========= =========
Operating profit (loss):
OSB $ 146.6 $ 309.1 $ 317.9 $ 562.7
Siding 16.4 16.4 23.4 27.7
Engineered Wood Products 12.1 0.7 17.7 (0.2)
Other 5.2 3.1 10.7 6.6
Other operating credits and
charges, net (1.4) (2.4) (1.1) (9.1)
Gain (loss) on sales of and
impairment of on long lived
assets 0.7 (0.2) 0.9 (13.0)
General corporate and other
expenses, net (20.2) (26.9) (43.6) (52.8)
Early extinguishment of debt - (1.2) - (41.3)
Foreign currency gains (losses) (1.4) 1.3 (2.0) 1.1
Investment income (interest
expense), net 1.6 (6.4) 1.4 (16.1)
------- ------- --------- ---------
Income from operations before
taxes 159.6 293.5 325.3 465.6
Provision for income taxes 55.2 105.4 115.5 168.0
------- ------- --------- ---------
Income from continuing operations
before cumulative effect $ 104.4 $ 188.1 $ 209.8 $ 297.6
======= ======= ========= =========
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. Other Operating Charges and Credits, Net:
The major components of "Other operating charges and credits, net"
in the Consolidated Statements of Income for the quarter and six
months ended June 30 are reflected in the table below and are
described in the paragraphs following the table:
Quarter Ended June 30, 2005 2004
------------- -------------
Pre- After Pre- After
tax tax tax tax
------ ------ ------ ------
Charges associated with the corporate
relocation $(1.5) $(0.9) $(2.4) $(1.5)
Other 0.1 0.1 - -
------ ------ ------ ------
$(1.4) $(0.8) $(2.4) $(1.5)
====== ====== ====== ======
Six Months Ended June 30, 2005 2004
------------- -------------
Pre- After Pre- After
tax tax tax tax
------ ------ ------ ------
Revisions to environmental contingency
reserves $ - $ - $ 1.7 $ 1.0
Charges associated with the corporate
relocation (2.1) (1.3) (4.4) (2.7)
Loss related to assets and liabilities
transferred
under contractual arrangement 1.0 0.6 - -
Increase in litigation reserves - - (6.0) (3.7)
Other - - (0.4) (0.2)
------ ------ ------ ------
$(1.1) $(0.7) $(9.1) $(5.6)
====== ====== ====== ======
In the first quarter of 2004, LP recorded a gain of $1.7 million
($1.0 after taxes, or $0.01 per diluted share) associated with
a reduction in environmental reserves in relation to our former
Alaska operations, a charge of $6.0 million ($3.7 million after
taxes, or $0.3 per diluted share) for an increase in litigation
reserves due to an adverse court ruling and a charge of $2.0
million ($1.2 million after taxes, or $0.01 per diluted share)
associated with the relocation and consolidation of LP's corporate
offices to Nashville, Tennessee.
In the second quarter of 2004, LP recorded a charge of $2.4
million ($1.5 million after taxes, or $0.01 per diluted share)
associated with the relocation and consolidation of LP's corporate
offices to Nashville, Tennessee.
In the first quarter of 2005, LP recorded a gain of $0.9 million
($0.6 million after taxes, or $0.01 per diluted share) associated
with the recovery of a previous loss associated with the sale of
the Samoa, California pulp mill and a charge of $0.6 million ($0.4
million after taxes, or $0.00 per diluted share) associated with
the relocation and consolidation of LP's corporate offices to
Nashville, Tennessee.
In the second quarter of 2005, LP recorded a charge of $1.5 million
($0.9 million after taxes, or $0.01 per diluted share) associated
with the relocation and consolidation of LP's corporate offices to
Nashville, Tennessee.
3. Gain (Loss) on Sale or Impairment of Long-Lived Assets:
The major components of "Gain (loss) on sale or impairment of
long-lived assets" in the Consolidated Statements Of Income for the
quarter and six months ended June 30 are reflected in the table
below and are described in the paragraphs following the tables:
Quarter Ended June 30, 2005 2004
------------- --------------
Pre- After Pre-tax After
tax tax tax
Gain (loss) on other long-lived assets,
net $(0.5) $(0.3) $ (0.2) $(0.1)
Impairment charges on fixed assets 1.2 0.7 - -
----- ----- ------ -----
$ 0.7 $ 0.4 $ (0.2) $(0.1)
====== ====== ======= ======
Six months ended June 30, 2005 2004
------------- --------------
Pre- After Pre- After
tax tax tax tax
Gain (loss) on other long-lived assets,
net $(0.3) $(0.2) $ (0.1) $(0.1)
Impairment charges on fixed assets 1.2 0.7 (12.9) (7.9)
------ ------ ------- ------
$ 0.9 $ 0.6 $(13.0) $(8.0)
====== ====== ======= ======
In the first quarter of 2004, LP recorded a loss of $9.7 million
($6.4 million after taxes, or $0.05 per diluted share) on the
cancellation of a capital project to build a veneer mill in British
Columbia and $3.2 million ($2.0 million after taxes, or $0.02 per
diluted share) for impairment of timber rights associated with a
cedar mill in British Columbia, Canada to reduce the book value to
the estimated realizable sales value.
In the second quarter of 2005, LP reversed $1.2 million on the
impairment recorded in the first quarter of 2004 due to
management's decision to continue to retain and operate certain
timber tenure rights previously classified as discontinued
operations.
4. Income Taxes
Quarter Ended Six Months Ended
June 30, June 30,
---------------- -----------------
2005 2004 2005 2004
Continuing operations $159.6 $ 293.5 $325.3 $465.6
Discontinued operations (6.6) 7.0 (12.6) 2.1
------- -------- -------- -------
153.0 300.5 312.7 467.7
Total tax provision 52.7 108.1 110.7 168.8
------- -------- -------- -------
Net income $100.3 $ 192.4 $202.0 $298.9
======= ======== ======== =======
Accounting standards require that the estimated effective income
tax rate (based upon estimated annual amounts of taxable income and
expense) by income component for the year be applied to
year-to-date income or loss at the end of each quarter. At year
end, the income tax accrual is adjusted to actual with the
difference between the previously accrued year to date balance and
actual being charged to the current quarter. The primary difference
between the blended rate (39%) on continuing operations and the
calculated rate relates to a permanent difference associated with
certain inter-company debt which is denominated in Canadian
dollars. The components and associated effective income tax rates
applied to each period are as follows:
Quarter Ended June 30,
---------------------------------
2005 2004
---------------- ----------------
Tax Tax Tax Tax
Provision Rate Provision Rate
---------- ----- ---------- -----
Continuing operations $ 55.2 35% $105.4 36%
Discontinued operations (2.5) 38% 2.7 39%
---------- ----------
$ 52.7 34% $108.1 36%
========== ==========
Six Months Ended June 30,
---------------------------------
2005 2004
---------------- ----------------
Tax Tax Tax Tax
Provision Rate Provision Rate
---------- ----- ---------- -----
Continuing operations $115.5 36% $168.0 36%
Discontinued operations (4.8) 38% 0.8 38%
---------- ----------
$110.7 35% $168.8 36%
========== ==========
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
SUMMARY OF PRODUCTION VOLUMES
Quarter Ended Six Month Ended
June 30, June 30,
--------------- ----------------
2005 2004 2005 2004
------- ------- --------- ------
Oriented strand board, million square
feet 3/8" basis 1,402 1,397 2,773 2,761
Oriented strand board, million square
feet 3/8" basis (produced by wood-
based siding mills) 23 3 26 8
Wood-based siding, million square
feet 3/8" basis 264 254 514 514
Engineered I-Joist, million lineal
feet 23 23 49 45
Laminated veneer lumber (LVL),
thousand cubic feet 3,182 3,054 6,375 5,890
Composite Decking, thousand lineal
feet 14 10 26 16
Vinyl Siding, squares 775 804 1,510 1,591
CONTACT: Louisiana-Pacific Corporation, Nashville
Media Relations:
Mary Cohn, 615-986-5886
or
Investor Relations:
Mike Kinney or Becky Barckley, 615-986-5600
www.lpcorp.com
SOURCE: Louisiana-Pacific Corporation
|
