LP Building Solutions Reports Fourth Quarter and Full Year 2023 Results, and Provides First Quarter and Full Year Outlook for 2024

Louisiana-Pacific Corporation (“LP”) reported its financial results for the fourth quarter and year ended December 31, 2023.

Key Highlights for the Fourth Quarter of 2023, Compared to the Fourth Quarter of the Prior Year

Siding net sales decreased by 14% to $332 million on lower volumes partially offset by higher prices
Oriented Strand Board (OSB) net sales increased by 6% to $272 million
Consolidated net sales decreased by 7% to $658 million
Net income was $59 million, an increase of $69 million
Net income per diluted share was $0.81 per share, an increase of $0.92 per share
Adjusted EBITDA⁽¹⁾ was $129 million, an increase of $29 million
Adjusted Diluted EPS⁽¹⁾ was $0.71 per diluted share, an increase of $0.10 per diluted share
Cash provided by operating activities was $159 million

Key Highlights for the Full Year, Compared to Prior Year

Siding net sales decreased by 10% to $1.3 billion
OSB net sales decreased by 50% to $1.0 billion
Consolidated net sales decreased by 33% to $2.6 billion
Net income was $178 million, a decrease of $905 million
Net income per diluted share was $2.46 per share, a decrease of $11.41 per share
Adjusted EBITDA⁽¹⁾ was $478 million, a decrease of $911 million
Adjusted Diluted EPS⁽¹⁾ was $3.22 per diluted share, a decrease of $8.55 per diluted share
Cash provided by operating activities was $316 million

Capital Allocation Update

Paid $300 million in capital expenditures in 2023
Paid $80 million for facility assets in Wawa, Ontario, Canada in 2023
Paid $69 million in cash dividends in 2023
Declared a quarterly cash dividend of $0.26 per share
Cash and cash equivalents of $222 million and borrowing availability under revolving credit facility of $550 million as of December 31, 2023, resulting in total liquidity of approximately $770 million
Availability of $200 million remaining under the share repurchase program authorized in May 2022

“LP finished the quarter and the year with results that reflect increased operational efficiency and an improving outlook for single-family housing,” said LP Chairperson and Chief Executive Officer Brad Southern. “Siding inventory and sell-through patterns remain seasonally normal. As we look forward to 2024 and beyond, LP’s recent investments in mill and prefinishing capacity leave us well positioned for expansion and share gains in Siding and Structural Solutions.”

Fourth Quarter 2023 Highlights

Net sales for the fourth quarter of 2023 decreased year-over-year by $47 million (or 7%) to $658 million. Siding revenue decreased $54 million (or 14%), due to 15% lower volumes partially offset by 1% higher prices. OSB net sales increased $16 million (or 6%), driven by 9% higher prices partially offset by 3% lower volumes. The LP South America (LPSA) segment revenues increased year-over-year by $1 million and Other revenues decreased year-over-year by $10 million.

Net income increased year-over-year by $69 million to $59 million ($0.81 per diluted share) primarily due to an increase in Adjusted EBITDA of $29 million (or 29%) and the non-recurrence of a non-cash, pre-tax pension settlement charge of $78 million in the fourth quarter of 2022, partially offset by an $18 million increase in the provision for income taxes. The year-over-year increase in Adjusted EBITDA includes $17 million due to higher OSB selling prices and a $13 million decrease in inflationary costs (including freight, raw materials, and labor).

Full Year 2023 Highlights

Net sales for 2023 decreased year-over-year by $1,273 million (or 33%) to $2,581 million. OSB revenue decreased $1,036 million due to 40% lower prices and 18% lower volumes. Siding revenue decreased $141 million (or 10%), due to 14% lower volumes, partially offset by 5% higher prices. The LPSA segment and Other revenues decreased year-over-year by $36 million and $61 million, respectively.

Net income decreased year-over-year by $905 million (or 84%) to $178 million ($2.46 per diluted share) primarily due to a decrease in Adjusted EBITDA of $911 million (or 66%) and a decrease in income from discontinued operations, net of income taxes of $198 million, partially offset by a $200 million decrease in the provision for income taxes. The decrease in Adjusted EBITDA includes $793 million due to lower OSB selling prices, a decrease in OSB sales volumes of $87 million, and a reduction in Siding sales volumes of $95 million, partially offset by an increase in Siding average selling prices of $52 million.

Segment Results

Siding

The Siding segment serves diverse end markets with a broad product offering, including LP^® SmartSide^® Trim & Siding, LP^® SmartSide^® ExpertFinish^® Trim & Siding, LP BuilderSeries^® Lap Siding, and LP^®Outdoor Building Solutions™ (collectively referred to as Siding Solutions). The Siding Solutions products consist of a full line of engineered wood siding, trim, soffit, and fascia.

The effects of list price increase drove year-over-year increases in the average net selling price for the fourth quarter and full year 2023. The volume decreases for the fourth quarter and full year 2023 were driven by record results in the comparable period and challenging new and existing home sales markets in the current period.

Fourth quarter 2023 Adjusted EBITDA decreased year-over-year by $17 million, reflecting the net impact of lower volumes, partially offset by higher average selling prices, a $7 million decrease in Siding mill capacity investments, and a $6 million decrease in inflationary costs including freight, raw materials, and labor. Full year 2023 Adjusted EBITDA decreased year-over-year by $70 million, which reflects the net impact of lower volumes, a $10 million decrease in Siding mill capacity investments, a $10 million increase in operational support costs, and a $5 million press rebuild, partially offset by higher average selling prices.

Oriented Strand Board (OSB)

The OSB segment manufactures and distributes OSB structural panel products, including the innovative value-added OSB product portfolio known as LP^® Structural Solutions (which includes LP TechShield^® Radiant Barrier, LP WeatherLogic^® Air & Water Barrier, LP Legacy^® Premium Sub-Flooring, LP NovaCore^® Thermal Insulated Sheathing, LP FlameBlock^® Fire-Rated Sheathing, and LP TopNotch^® 350 Durable Sub-Flooring). OSB is manufactured using wood strands arranged in layers and bonded with resins.

Fourth quarter 2023 net sales increased year-over-year $16 million (or 6%), reflecting a $17 million increase in revenue due to higher OSB selling prices. Full year 2023 net sales decreased year-over-year by $1,036 million (or 50%) including a $793 million decrease in revenue due to lower average selling prices and a $217 million decrease in sales volumes, including $112 million of lower production volume from the conversion of the Sagola mill to siding production.

Adjusted EBITDA for fourth quarter of 2023 increased year-over-year by $46 million primarily due to higher commodity selling prices, a $7 million decrease in inflationary costs including freight, raw materials, and labor, and a $7 million decrease in mill-related costs. Full year 2023 Adjusted EBITDA decreased year-over-year by $814 million primarily due to the lower average selling prices.

LPSA

The LPSA segment manufactures and distributes LP OSB structural panel and Siding Solutions products in South America and certain export markets. This segment also sells and distributes a variety of companion products to support the region’s transition to wood frame construction. The LPSA segment carries out manufacturing operations in Chile and Brazil and operates sales offices in Argentina, Brazil, Chile, Colombia, Mexico, Paraguay, and Peru.

LPSA net sales for the fourth quarter of 2023 increased $1 million year-over-year on higher volumes offset by lower average selling prices. Net sales for full year 2023 decreased year-over-year by $36 million driven by lower OSB sales volumes and average selling prices.

Adjusted EBITDA for the fourth quarter of 2023 decreased year-over-year by $1 million, reflecting the net impact of lower average selling prices, higher volumes, and lower inflationary costs. Full year 2023 Adjusted EBITDA decreased year-over year by $36 million, reflecting the lower sales volumes and average selling prices, unfavorable foreign currency impacts of $6 million, and equipment relocation cost of $3 million.

For the full fourth quarter results, click here.

About LP Building Solutions

As a leader in high-performance building solutions, Louisiana-Pacific Corporation (LP Building Solutions, NYSE: LPX) manufactures engineered wood products that meet the demands of builders, remodelers and homeowners worldwide. LP’s extensive portfolio of innovative and dependable products includes Siding Solutions (LP^® SmartSide^® Trim & Siding, LP^® SmartSide^® ExpertFinish^® Trim & Siding, LP BuilderSeries^® Lap Siding and LP^® Outdoor Building Solutions^™), LP^® Structural Solutions (LP^® TechShield^® Radiant Barrier, LP WeatherLogic^® Air & Water Barrier, LP Legacy^® Premium Sub-Flooring, LP^® FlameBlock^® Fire-Rated Sheathing, LP NovaCore^® Thermal Insulated Sheathing and LP^® TopNotch^® 350 Durable Sub-Flooring) and oriented strand board (OSB). In addition to product solutions, LP provides industry-leading customer service and warranties. Since its founding in 1972, LP has been Building a Better World^™ by helping customers construct beautiful, durable homes while stockholders build lasting value. Headquartered in Nashville, Tennessee, LP operates 23 plants across the U.S., Canada, Chile, and Brazil. For more information, visit LPCORP.COM.

Contact:

Aaron Howald – Investor Contact – (615) 986-5792

Source: Louisiana-Pacific Corporation

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