LP posts Q4 loss
Sagging OSB prices and lower shipments result in sales decline for building products and solutions provider.
Louisiana-Pacific Corporation (LP) reported that fourth quarter 2019 sales fell 9% to $537 million from sales of $589 million in the fourth quarter 2018.
Sales for the full year dropped 18% to $2.3 billion compared to full year sales of $2.8 billion in 2018.
The Nashville, Tenn.-based building products and building solutions supplier also posted a fourth quarter 2019 net loss of $51 million compared to a net income of $17 million for the same period a year ago.
LP said the loss is primarily due to $86 million of non-cash impairments, before income taxes. Included within these non-cash impairments are $47 million related to non-operating assets located at Val-d’Or and St Michel, Quebec; Cook, Minn.; and Silsbee, Texas, and $39 million related to a facility producing laminated strand lumber (LSL) and oriented strand board (OSB) within engineered wood products (EWP).
For the full year, LP posted a net loss of $5 million compared to a net income of $395 million for 2018. In addition to the OSB pricing and shipment declines, net income attributed to LP decreased due to non-cash impairments of $92 million, before income taxes, including $86 million of non-cash impairments recognized in the fourth quarter, the company said.
For the fourth quarter, siding net sales increased 8% to $230 million. The increases are primarily related to SmartSide Strand revenue growth of 11 percent. For the full year, siding net sales increased 2% to $963 million.
OSB sales plummeted nearly 33% to $172 million for the quarter and descended more than 40.6% to $777 million for the year.
EWP sales – consisting of LP SolidStart I-Joist (I-Joist), laminated veneer lumber (LVL), LSL and related products – rose 16% to $13 million in the fourth quarter while full-year sales fell 3% to $396 million.
The bottom line: LP reports a $51 million net loss for the fourth quarter, partly due to sagging OSB prices and lower shipments.
What the CEO said: “Our sales and operations teams finished 2019 with strong execution,” said LP CEO Brad Southern. “Siding built on Q3 with a record fourth quarter of SmartSide Strand sales and safe operations. OSB continued its outstanding cost control, ending the quarter and the year with positive EBITDA at the bottom of the OSB price cycle. We generated $100 million in net cash from operations and $0.05 in adjusted earnings per share in Q4. We finished the year strong and remain ahead of pace to achieve our 2021 targets.”
Company info: LP’s full fourth quarter 2019 and year-end results can be read here.
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