LP Reports Fourth Quarter and Year End 2008 Results.NASHVILLE, Tenn. -- Louisiana-Pacific Corporation (LP) (NYSE NYSE
See: New York Stock Exchange : LPX LPX Louisiana Pacific (stock symbol)
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LPX Low Profile Extension ) reported today results for the fourth quarter of 2008, which included the following:
* Total sales for the fourth quarter of $250.2 million were down 33 percent versus a year ago, primarily the result of dramatically reduced US housing starts, which dropped 34 percent from fourth quarter 2007 levels, due to weakness in home building. For the year, US housing starts dropped 31 percent while LP's sales declined 19 percent.
* A net loss from continuing operations continuing operations
Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $339.4 million, or $3.30 per diluted share, for the fourth quarter of 2008, which includes $2.66 per diluted share of non-cash impairment charges associated with goodwill, $0.16 per diluted share associated with further valuation reductions in LP's auction rate securities portfolio, $0.08 per diluted share of non-cash increases in certain settlement reserves and $0.05 per diluted share in restructuring charges restructuring charge
The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. associated with LP's market related curtailments and right sizing initiatives.
* Cash and investments at year-end was $215.1 million, down from the 2007 year-end balance of $746.3 million. The reduction reflects the $118.6 million write-down of auction rates securities, $125 million in debt repayments, about $55 million in legal settlement payments, $161.4 million spent on capital improvements and the purchase of LP's Brazil investment, as well as cash used in operations.
"The decline in home building and related activity experienced throughout the first nine months of the year accelerated during the fourth quarter of 2008, driven by the ongoing credit crisis and deteriorating global economic conditions," said LP's Chief Executive Officer Rick Frost.
FOURTH QUARTER RESULTS
For the quarter ended December 31, 2008, LP reported net sales Net Sales
The amount a seller receives from the buyer after costs associated with the sale are deducted.
This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $250.2 million, down from $376.6 million in 2007. For the fourth quarter, the company reported an operating loss operating loss
The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $366.2 million, which included $273.5 million of non-cash goodwill impairment charges and $22.6 million of other operating charges and credits. For the fourth quarter of 2007, the company had an operating loss of $86.9 million, which included other operating credits and charges of $7.4 million and loss or impairment of long-lived assets of $3.2 million.
For the fourth quarter of 2008, LP reported a net loss from continuing operations of $339.4 million, or $3.30 per diluted share, as compared with net loss from continuing operations of $49.1 million, or $0.48 per diluted share, for the fourth quarter of 2007. Diluted earnings per share diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the fourth quarter of 2008 included non-cash impairment charges associated with goodwill of $2.66 per diluted share, other than temporary impairment of investments of $0.16 per diluted share and other operating credits and charges of $0.13 per diluted share. Diluted earnings per share for the fourth quarter of 2007 included other than temporary impairment of investments of $0.12 per diluted share and other operating charges and credits and other items of $0.06 per diluted share.
For the year ended December 31, 2008, the company had net sales of $1,376.2 million, compared with net sales of $1,704.9 million in 2007. For the year, LP reported an operating loss of $643.6 million, including $273.5 million of non-cash goodwill impairment charges and other operating charges and credits, including legal settlement charges, of $90.3 million. This compares with an operating loss of $266.5 million in 2007, which included $56.8 million of impairment charges on long-lived assets and a gain of $12.5 million in other operating charges and credits due principally to insurance settlements.
For 2008, the company had a net loss from continuing operations of $565.1 million, or $5.49 per diluted share, which included $2.66 per diluted share of goodwill impairment charges, $0.71 per diluted share of other than temporary impairment charges on auction rate securities and $0.59 per diluted share in other operating charges and credits and other items primarily associated with the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. settlements. This compares with a net loss from continuing operations of $155.3 million, or $1.50 per diluted share, in 2007, which included $0.34 per diluted share of impairment of long-lived assets, other than temporary impairment of investments of $0.12 per diluted share and a gain in other operating charges and credits of $0.07 per diluted share.
Order of Saint Benedict SEGMENT
LP's OSB segment manufactures and distributes OSB structural panel products. LP is currently operating 10 facilities and has indefinitely curtailed four other facilities due to market conditions. The OSB segment reported net sales for the fourth quarter of 2008 of $109.0 million, down 42 percent compared with $186.5 million of net sales in the fourth quarter of 2007. For the fourth quarter of 2008, the OSB segment reported an operating loss of $31.1 million - an improvement of 42 percent - compared with an operating loss of $54.0 million in the fourth quarter of 2007. For the fourth quarter of 2008 as compared to the fourth quarter of 2007, sales volumes were down 48 percent with sales price increasing by 6 percent.
For 2008, the OSB segment sales were down approximately 25 percent to $621.5 million from $823.8 million in 2007. For the year, the OSB segment reported an operating loss of $155.2 million for 2008 - an improvement of 20 percent - compared to a $194.7 million loss in 2007. For 2008 as compared to 2007, sales volumes were down 29 percent with sale price increasing by 5 percent.
Operating earnings Operating Earnings
Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue.
Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before reflected the favorable effects of continued actions taken to reduce operating costs operating costs npl → gastos mpl operacionales . Also, in the fourth quarter of 2008, LP realized reductions in the cost of petroleum-based products used in production and benefited from the weakening of the Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin"
dollar - the basic monetary unit in many countries; equal to 100 cents .
"In 2008, we continued to take a number of significant steps to reduce the losses in our OSB business through market curtailments and cost reductions," Frost explained. "Throughout this process, we remain committed to our safety and quality programs."
LP's Siding segment consists of LP SmartSide[R] siding as well as LP's prefinished pre·fin·ished
Coated or treated before being sold or distributed: prefinished wood paneling. LP CanExel[R] siding line. These products are used in new construction as well as in the repair and remodeling remodeling /re·mod·el·ing/ (re-mod´el-ing) reorganization or renovation of an old structure.
bone remodeling markets.
The Siding segment reported net sales of $76.1 million in the fourth quarter of 2008, down 17 percent from $91.6 million in the year-ago fourth quarter. For the fourth quarter of 2008, the Siding segment reported an operating loss of $11.1 million compared to an operating loss of $4.3 million in the year-ago quarter.
For the full year, Siding segment net sales were down 6 percent to $423.8 million from $448.9 million in 2007. Operating earnings for 2008 were $2.8 million versus $33.6 million in 2007. While the sales decline in 2008 due to reduced building activity negatively affected earnings for Siding, results were further lowered due to additional costs associated with converting the production processes at LP's Roaring River Roaring River may refer to any of several rivers:
In the fourth quarter of 2008, sales were off across all regions as construction stopped in many areas and dealers focused on rebalancing Rebalancing
The process of realigning the weightings of one's portfolio of assets.
For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting and lowering their inventories. Consistent with actions taken in OSB, the Siding segment also cut production rates during the quarter to address inventory levels.
ENGINEERED WOOD PRODUCTS SEGMENT (EWP EWP Engineered Wood Products
EWP Emergency Watershed Protection
EWP East West Players (Los Angeles, CA)
EWP Elevated Work Platform
EWP Eastern White Pine
EWP Employee Work Profile
EWP Efficacy Working Party )
The EWP segment is comprised of I-Joist (IJ), Laminated Veneer Lumber Laminated veneer lumber (LVL) is an engineered wood product that uses multiple layers of thin wood assembled with adhesives. It offers several advantages over typical milled lumber: it is stronger, straighter, and more uniform. and Laminated Strand Lumber (LVL LVL
In currencies, this is the abbreviation for the Latvian Lats.
The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. and LSL (Link Support Layer) A common interface for network drivers. It provides a common language between the transport layer and the data link layer and allows different transport protocols to run over one network adapter or one transport protocol to run on different ). These products are principally used in new construction. Given the significant decline in housing starts, this segment saw similar reductions in sales. EWP segment sales in the fourth quarter of 2008 totaled $45.3 million, down 37 percent from $71.9 million in the year-ago quarter. Operating losses increased 358 percent to $11.9 million for the fourth quarter of 2008 from $2.6 million for the fourth quarter of 2007.
For 2008, the EWP segment reported net sales of $234.5 million, down 29 percent from $331.6 million in 2007. Operating loss in 2008 was $40.2 million compared to operating profits Operating profit (or loss)
Revenue from a firm's regular activities less costs and expenses and before income deductions.
See operating income. of $11.0 million during 2007.
For both the fourth quarter and the full year results, the lower operating results were driven by lower volumes, softening prices and significant start-up costs associated with the mill that produces LSL.
"As we had anticipated, 2008 proved to be a very challenging year for our businesses and we expect 2009 to also be difficult," Frost said. "Our goal this year is to position LP to emerge from the global economic crisis stronger than before. LP continues to execute a comprehensive set of plans to reduce our manufacturing costs, minimize capital expenditures, reduce headcount as appropriate, consolidate functional activities across businesses, reduce fixed costs fixed costs,
n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). , reduce layers of management, consolidate businesses, and a myriad of other actions to improve our costs, productivity and effectiveness in the future."
"Liquidity in this environment is critical. With the actions that we have already taken and our focus on cash, we are committed to maximizing the value of the $215 million in cash and investments at year-end. We are also actively considering other financing and refinancing Refinancing
An extension and/or increase in amount of existing debt. transactions to improve our overall liquidity."
"Based on our actions and plans to enhance liquidity, we believe when this economic downturn subsides, we will be well positioned to compete and prosper," Frost concluded.
At 10 a.m. ET (7 a.m. PT) Monday, March 2, LP will host a webcast on its fourth quarter 2008 financial results. To access the live webcast and accompanying presentation, visit www.lpcorp.com and go to the "Investor Relations Investor relations
The process by which the corporation communicates with its investors. " section from the main menu.
LP is a premier supplier of building materials Building materials used in the construction industry to create .
These categories of materials and products are used by and construction project managers to specify the materials and methods used for . , 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 forward-looking statement
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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.
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:
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(1) Includes volumes produced by joint venture operations or under sales arrangements and sold to LP.