Louisiana-Pacific Corporation (LP Building Solutions) reported first quarter 2022 net sales increased 31% to $1.337 billion.
LP Siding Solutions sales for the quarter increased more than 17% to $330 million. The Nashville, Tenn.-based company said the increase was a result of price increases and higher sales volume.
OSB sales saw 38% growth to $744 million for the quarter. LP said the increase in OSB revenue to 23% higher OSB prices and 12% higher volumes, primarily driven by the restart of its Peace Valley mill.
Net income attributed to LP for the first quarter jumped 51% to $484 million compared to a net income of $320 million for the same period last year.
In other news, LP reported the first production of LP SmartSide products at its Houlton, Maine facility along with the production of the first APA-approved SmartSide board.
To meet growing customer demand for SmartSide siding, in early 2021, LP announced a phased, multi-year plan to expand siding production capacity, starting with the conversion LP’s Houlton facility from the manufacture of oriented strand board (OSB) and laminated strand lumber to SmartSide siding.
In less than a year, LP said it successfully completed the initial phase of Houlton’s conversion to a siding mill, culminating in the pressing of the mill’s first siding board in late March. Following confirmation testing by APA – The Engineered Wood Association (an organization accredited by the American National Standards Institute to develop national consensus standards for engineered wood products), LP Houlton is now producing APA certified and trademarked siding.
In the initial phase, LP Houlton will produce soffit and LP ProStruct Flooring with SmartFinish, with SmartSide lap and trim starting production at the end of the second quarter this year. The site expects to achieve full operating capacity within a year.
“Customer demand for LP SmartSide Trim and Siding is at an all-time high,” said Executive Vice President, General Manager of Siding Jason Ringblom. “We will always take care of our customers, which is why siding capacity expansion projects, like our conversion of LP Houlton, are incredibly strategic and important to LP.”
Once LP Houlton reaches full capacity following its initial ramp-up period, it will add approximately 220 million square feet of SmartSide operating capacity to LP’s siding business, bringing the company’s total siding operating capacity to approximately 1.9 billion square feet.
The Bottom Line: Higher prices and volume push LP’s earnings upward by 51% as total revenue grows 31%.
What the CEO said: “Siding Solutions sales grew at 17% to set a quarterly record while achieving a 25% EBITDA margin despite inflationary headwinds and simultaneous capacity expansion projects," said LP Chair and CEO Brad Southern. "LP SmartSide siding production began on time at our Houlton, Maine facility. Higher prices for OSB and EWP helped LP achieve its second-highest quarter for adjusted EBITDA, and our ongoing share repurchases resulted in a record quarterly adjusted earnings per share.”
Company info: Click here to read LP Building Solutions’ full first quarter financial report.